Hyundai Motor India, India’s biggest IPO, disappoints on stock market debut

Hyundai Motor India’s shares made a disappointing debut on Tuesday, listing at a 1.5% discount to their issue price of Rs 1,960. The stock opened at Rs 1,931 on the BSE and Rs 1,934 on the NSE, falling short of investor expectations amid ongoing market volatility and concerns about the company’s valuation.
The automaker’s stock market debut was in line with what analysts had expected, but lower than what the grey market premium had indicated.
The Rs 27,870 crore IPO was subscribed 2.3 times, achieving full subscription only on the final day, reflecting tepid interest from investors. With valuations seen as fully priced and the issue being a complete offer for sale (OFS), the company will not receive any proceeds from the IPO, further dampening short-term sentiment.
The IPO, which closed with an overall subscription of 2.37 times, saw tepid interest from retail investors, who subscribed to just 50% of their allotted shares. Institutional buyers, particularly Qualified Institutional Buyers (QIBs), propped up the offer, subscribing seven times their allocation. However, this institutional push wasn’t enough to prevent a muted listing.
Hyundai’s limited exposure to electric vehicles (EVs) and hybrids, representing only 11% of its current portfolio, has raised concerns about its ability to compete in a market rapidly moving towards EV adoption. Additionally, operational hurdles, such as constrained production capacity and a lack of recent model launches, have further dampened enthusiasm.
Jaspreet Singh Arora, Chief Investment Officer at Equentis, pointed out that Hyundai faces tough competition in the Indian auto market, where price cuts and incentives are commonplace. This competitive environment and regulatory pressures on promoters to reduce stakes have led to caution among investors.
Despite the lacklustre debut, analysts remain optimistic about Hyundai’s long-term prospects. With a 15% share of India’s passenger vehicle market and a commanding 63% share in utility vehicle sales, the company’s dominant position in key segments offers a solid foundation for future growth.
Brokerages like ICICI Direct and Nuvama Wealth Management see long-term value in Hyundai’s growth plans, particularly its focus on expanding production capacity and localisation efforts. Choice Equity Broking also maintains a positive long-term outlook, advising investors to focus on Hyundai’s premiumisation strategy and market expansion rather than short-term performance.
While the IPO may not have delivered an immediate boost, Hyundai’s strong market fundamentals suggest that patient investors could still see gains in the future.