Hyundai India IPO May List Positively Due to Rebound in Grey Market Premium

Hyundai Motor India Ltd (HMIL) is set to officially list its shares on the BSE and NSE on October 22, following an impressive 237% subscription to its Rs 27,870-crore initial public offering (IPO). The IPO is notable for being the largest in India’s history, demonstrating robust interest from Qualified Institutional Buyers (QIBs), whose portion was oversubscribed by nearly 700%, or 6.97 times.

Despite the overwhelming QIB response, the retail demand for Hyundai's IPO remained muted, raising concerns among analysts. The sluggish interest from retail investors can be attributed to worries about high valuations, a notable decline in the grey market premium (GMP) for shares, and the overall sluggish demand in the automotive sector, particularly during the festive season.

However, a day before its official listing, the shares showed signs of recovery, rebounding to a premium of Rs 95 in the grey market. This rebound indicates a potential positive listing for investors, suggesting that confidence may be returning ahead of the market debut.

The IPO's price band is set between Rs 1,865 and Rs 1,960 per share, and the company anticipates that the listing will enhance its visibility and brand image, providing liquidity and a public market for its shares. Since commencing operations in India in 1996, Hyundai has established a strong presence, currently offering 13 models across various segments.

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As investors await the official listing, all eyes will be on the market’s reception and the potential impact of the automotive sector's performance during the festive period.

[Disclaimer: The information provided in this blog is for informational purposes only and should not be considered financial advice. Please consult a financial advisor before making any investment decisions.]