Hyundai India stock falls as much as 4.6% after record IPO

Shares of Hyundai Motor India fell as much as 4.6% soon after their stock market debut, but stabilised soon after.

The automaker’s shares made their debut on the stock exchanges at a discount to the issue price. The listing price on the National Stock Exchange was Rs 1,934, representing a discount of 1.3% on the issue price of Rs 1,960.

Wiithin the first 30 minutes of trading, shares fell up to Rs 1,844.65 on the NSE, down 4.9% from the listing price. However, the shares pared some of its loss with shares trading at Rs 1,902.70, down 1.9% as of 10:42 IST.

The underwhelming debut was in line with the market expectations, said Shivani Nyati, Head of Wealth, Swastika Investment Ltd. “The subdued grey market premium (GMP) of ₹67 (3.42%) ahead of listing had already indicated limited enthusiasm for listing gains, and the company’s fully priced valuation contributed to the muted debut,” Nyati said.

However, Nyati noted that Hyundai India's strong fundamentals, being the second-largest passenger vehicle maker in India and its strategic focus on the sports utility vehicle segment continue to support its long-term growth prospects.

The price band of the IPO was set in the range of Rs 1,865 to Rs 1,960 per share. The automaker raised Rs 8,315.28 crore from 225 anchor investors last week.

Hyundai’s IPO has become the largest in the country to date, surpassing Life Insurance Corp’s Rs 21,000-crore IPO two years ago. This is also the first IPO by a carmaker in India in the two decades since Maruti Suzuki's listing in 2003.

The three-day IPO subscription saw tepid investor interest in the first two days but a strong demand from Qualified Institutional Buyers (QIBs) on the final day ensured the successful completion. The issue drew subscriptions 2.37 times the number of shares on offer.

Hyundai India’s IPO is a pure offer for sale. None of the proceeds of the issue has come to the Indian unit. The South Korean parent company Hyundai Motor Company diluted its 17.5% stake in its wholly-owned India unit.

Kotak Mahindra, Citi Group, HSBC Securities, JP Morgan and Morgan Stanley are the lead book-running managers for the IPO.

READ MORE: Hyundai India to dilute 7.5% additional stake in 3-5 years