Hyundai Stock Price Expectation: Check Latest GMP Ahead of D-Street Debut

Shares of Hyundai Motors India will make their debut on Dalal Street on Tuesday, with investors closely watching India’s biggest IPO.

The IPO, which opened on October 15, was initially met with hesitation from investors, but by the close on Thursday, October 17, 2024, it had been subscribed more than twice.

Much of the demand came from Qualified Institutional Buyers (QIB), although other categories of investors remained cautious due to valuation concerns and the falling gray market premium.

At the end of the last day, Hyundai’s IPO was subscribed 2.37 times in total. The retail category was subscribed 0.50 times, non-institutional investors (NIIs) subscribed 0.60 times, while QIBs led the charge with a subscription of 6.97 times, as of 5:15 pm on October 17, 2024 .

Jaspreet Singh Arora, Chief Investment Officer at Equentis, highlighted several concerns that could affect Hyundai’s short- and medium-term prospects.

“Although Hyundai is a major player in the Indian automobile industry, there are several factors that could hamper its listing performance in the near future. The passenger vehicle (PV) industry is expected to grow at a slower rate of 4.5%-6.5% during FY2024-29, compared to 5% in the previous five years, according to with CRISIL. Furthermore, Hyundai’s presence in electric vehicles (EV), hybrids and CNG cars is limited, representing just 11% of its portfolio. This is much lower than its competitors, who are further ahead in adapting to the shift to EVs,” said Arora.

He also highlighted that Hyundai operates in a highly competitive market, where price reductions and incentives are common. Limited production capacity and lack of new model launches add to the challenges the company faces in standing out from its peers. Another concern is Hyundai India’s operational structure, as it does not own Kia Motors, which operates independently but competes in a similar market segment. This could lead to conflicts of interest that could affect Hyundai’s performance.

Arora also said that historical trends of large IPOs such as Paytm, Coal India and LIC have shown that shares in these offerings tend to face challenges during the first 12 to 24 months after listing.

“There is usually an excess of large share fluctuations and the need for promoters to reduce their shareholding below 75% to comply with Sebi regulations,” he added.

GRAY MARKET AWARD

The gray market premium (GMP), which indicates the potential listing price of a stock, has not been promising for Hyundai’s IPO.

On October 21, 2024, at 11:30 am, the GMP was Rs 75, indicating a nominal premium over the issue price. With a price band of Rs 1,960, the estimated listing price remains at Rs 2,035, a gain of 3.83%.

Investors who have applied for Hyundai’s IPO can check the status of the placement through KFin Technologies Limited, which is the official registrar of the issue. Distribution details can also be found on the Bombay Stock Exchange (BSE) website.

(Disclaimer: The views, opinions and recommendations expressed in this article are those of experts and brokers. They do not reflect the views of India Today Group. You are advised to consult a qualified broker or financial advisor before making any investment decision.)