Hyundai India fends off a scare as IPO booked 2.37 times on last day, but GMP down to 0

Warding off a scare, the mega IPO of Hyundai India sailed through on the last day of the bidding process. The overall subscription stood at 2.37 times at close, largely driven by bidding from institutional investors.

The categories reserved for Retail investors and non-institutional investors didn’t get fully subscribed, mainly due to concerns over expensive pricing. The retail section was subscribed 50% and the non-institutional investors portion saw 60% response.

The QIB portion of the Rs 27,870 crore issue was booked 6.97 times.

Even as the IPO closed for bidding, the GMP of the company in the grey market fell down to Rs 0, continuing the downward trend seen in the last few days.

There is a near consensus among analysts that subscribing to Hyundai IPO will be a strong play for long term investors in the growing passenger vehicle market as consumers increasingly prefer bigger and premium cars.

As many as 10 analysts advised investors to subscribe to the IPO for the long term.However, the premium PE valuation of 26x its FY25 earnings means that short-term investors may be in for a disappointment given the current GMP and valuation talk.Hyundai has ensured to maintain a stable share market in India historically. It enjoys loyalty among the Indian consumer base owing to smooth and affordable after sales service.

Equipped with R&D from Korea and an automated factory in Chennai, company has been able to optimise its operations while expanding it’s distribution. The automaker also 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 issue was completely an offer for sale (OFS) of 14.2 crore shares, offloaded by the company’s parent Hyundai Motor Global. Since the IPO is an OFS, all the proceeds will go to the selling shareholder.

Even though the entire proceeds from the IPO will go to the parent company, the management said funds will be used for research and development and new innovative offerings.

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