The street is closely watching Hyundai Motor India’s Initial Public Offering (IPO), which opened for subscription on October 15 and will close on October 17. The price band has been announced, and the Grey Market Premium (GMP) for the IPO remains steady at Rs 147. Considering the upper price band of Rs 1,960, current grey market trends suggest investors might see marginal gains of around 7% upon listing.
The GMP, a key indicator of grey market interest, has seen significant fluctuations recently. It previously peaked around Rs 570 in late September but experienced a sharp decline, falling to Rs 360 last week and further dropping below Rs 200 this week. This represents a substantial correction of nearly 72% from its high point. However, it’s crucial to remember that GMP figures are merely indicative of unlisted market sentiment and can be highly volatile. They offer a snapshot of potential listing enthusiasm but are not definitive predictors of stock performance post-IPO.
This IPO is ambitious, aiming to raise over Rs 27,000 crore through an Offer For Sale (OFS) of up to 14.2 crore shares. This valuation could reach up to Rs 1.6 lakh crore, making it potentially the largest stock offering in the Indian market this year. Hyundai Motor India’s IPO marks a significant moment, being the first automaker to go public in India in two decades, since Maruti Suzuki’s listing in 2003. This “go fashion” for IPOs in the current market, with Indian stock markets at record highs, reflects a broader trend of companies seeking public listings to capitalize on market momentum.
Hyundai Motor India’s decision to go public comes at a time when the company holds a strong position in the Indian automotive market. As the second-largest carmaker in India after Maruti Suzuki in terms of passenger vehicle sales volume in FY24, Hyundai has demonstrated robust financial performance. In FY23, the company reported revenues of Rs 60,000 crore and profits of Rs 4,653 crore, making it the most profitable unlisted car manufacturer in the country. This strong financial foundation underpins investor confidence as Hyundai steps into the public market.
The IPO process is being managed by a consortium of leading financial institutions, including Kotak Mahindra Capital, Citigroup Global, HSBC Securities, JP Morgan, and Morgan Stanley, serving as the book-running lead managers. KFin Technologies is acting as the registrar for the offering. The finalization of IPO allotment is expected by October 18, and the tentative listing date for the equity shares on both the NSE and BSE is set for October 22. Investors are keenly awaiting the listing, observing if the current “gmp go fashion” sentiment translates into strong market performance for Hyundai Motor India’s stock.
