As the Hyundai Motor India IPO enters its final day of subscription on October 17, 2024, the initial public offering (IPO) has opened with a price band set between ₹1,865 and ₹1,960 per equity share. The IPO commenced on October 15 and has so far witnessed tepid demand, raising questions among potential investors about whether to apply.
Current Subscription Status
By the end of the second day of bidding, the Hyundai Motor India IPO had recorded an overall subscription rate of 0.42 times. As of this morning, the subscription status indicates that the retail portion is booked at 0.40 times, while the non-institutional investor (NII) segment stands at 0.27 times. The qualified institutional buyer (QIB) portion has fared slightly better at 0.58 times. This lukewarm response raises concerns about the overall market sentiment towards the IPO.
Grey Market Premium (GMP)
The current grey market premium (GMP) for Hyundai Motor India shares is ₹17, suggesting that the stock may debut at approximately ₹1,977 on the Indian exchanges, translating to a premium of around 0.87%. This marks a significant decline from earlier GMP levels that peaked at ₹570, indicating a shift in investor sentiment.
Expert Opinions: Should You Apply?
Market analysts and brokerage firms have mixed opinions regarding the Hyundai Motor India IPO. While some experts express optimism about the company’s long-term growth prospects due to its strong market presence and plans for expansion in the electric vehicle sector, others caution potential investors about high valuations.According to Master Capital Service, the domestic passenger vehicle (PV) industry is projected to grow at a CAGR of 4.5% to 6.5%, depending on India’s GDP growth. They highlight Hyundai’s strong market share and strategic plans for premiumization and capacity expansion as positive indicators for long-term investors.Aditya Birla Capital also maintains a favorable outlook for Hyundai, citing its robust parentage and technological capabilities. However, they note that at the upper price band, the IPO is priced at a rich valuation of 26 times its FY24 earnings per share (EPS), which may leave limited upside for investors.Marwadi Shares and Finance assigns a subscribe rating to the IPO, emphasizing that Hyundai is the second-largest auto OEM in India and a leading exporter of passenger vehicles. They argue that it is available at reasonable valuations compared to its peers in the industry.
Conclusion
As we approach the final hours of subscription for Hyundai Motor India’s IPO, potential investors must weigh their options carefully. While there are compelling reasons to consider this investment based on long-term growth prospects and market positioning, concerns over valuation and current subscription rates should not be overlooked.Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research or consult with a financial advisor before making investment decisions.
