Hyundai IPO listing: The grey market premium (GMP) for Hyundai’s IPO has experienced a significant turnaround, rising to 5% from a previous dip of -3%. This shift in GMP indicates an improvement in investor sentiment surrounding Hyundai, suggesting a potentially positive listing.
In the grey market, Hyundai’s shares are currently trading at Rs 2,067, which represents a 5% (Rs 101-107) premium over the issue price of Rs 1,960.If this positive trend persists, Hyundai’s stock is expected to debut with gains when it lists on the stock exchanges on October 22, says an ET report.
However, it is crucial to note that grey market premiums are subject to volatility and serve only as an indicator of demand in the unlisted market, with the possibility of rapid fluctuations.
Hyundai’s IPO, India’s largest IPO, valued at Rs 27,870 crore, initially experienced muted demand and only achieved full subscription on the final day, primarily due to strong interest from non-institutional investors.
Despite lower-than-expected subscription numbers from retail and institutional investors, the recent increase in GMP indicates growing confidence in the stock.
Analysts widely agree that subscribing to the Hyundai IPO will be a strong play for long-term investors in the expanding passenger vehicle market, as consumers increasingly prefer larger and more premium cars, the report said.
However, with a price-to-earnings (P/E) valuation of 26 times its projected FY25 earnings, short-term investors may exercise caution, as the valuation remains high despite the improved grey market sentiment.
Hyundai has consistently maintained a stable market share in India, benefiting from customer loyalty due to its smooth and affordable after-sales service.
With R&D support from Korea and an automated factory in Chennai, the company has optimized its operations while expanding its distribution network. Additionally, Hyundai plans to gradually become a major player in the EV segment.
“We believe the company can take advantage of the PV market in India with its diverse offerings. We have a ‘Subscribe for Long Term’ rating for the issue,” said Arihant Capital.
The IPO is entirely an offer for sale (OFS) of 14.2 crore shares, offloaded by Hyundai Motor Global, the company’s parent. As the IPO is an OFS, all proceeds will go to the selling shareholder.
Despite this, management has said that the funds will be used for research and development and new innovative offerings.