Hyundai Motor India Limited IPO is open for investment today till 17th October. That means today is the last chance to place bets in this IPO. Let us tell you that this issue was opened on 15th October. The IPO of Hyundai Motor India, the Indian unit of South Korean vehicle manufacturer Hyundai, is the largest IPO in the country. It has overtaken the Rs 21,000 crore IPO of Life Insurance Corporation of India (LIC). However, in the last two days this issue has received a lukewarm response. This issue of approximately Rs 27,870 crore was subscribed only 42% till October 15-16. According to data till 1 pm today, this issue has been subscribed 1.19 times. This IPO was fully subscribed from its QIB segment while the retail quota has not been filled yet. Let us tell you that the price band of IPO is Rs 1,960 per share.
subscribe which part how much
According to NSE data, retail investors subscribed only 38% of the shares, while non-institutional investors subscribed 26%. At the same time, 58% subscription has been received in the qualified institutional buyers (QIB) portion. The employee portion has received 1.30 times subscription. Let us tell you that on the first day of the bidding process, only 18% of Hyundai Motor India IPO was subscribed. According to the data, bids were received for 4,17,21,442 shares against the offer of 9,97,69,810 shares under the IPO of size Rs 27,870 crore.
Why are investors not subscribing?
– The biggest reason behind not subscribing or reducing the IPO is the continuously falling price of its gray market premium i.e. GMP. Let us tell you that according to Investorgain.com, the GMP of this IPO has fallen by 97% in the last 20 days.
– This IPO is completely based on OFS and no new equity shares have been issued. That means the amount that will come from the IPO will not go to the company but to the promoter. This means that the money raised from IPO will not be used for the growth of the company.
Apart from this, according to some market analysts, the company has kept the valuation of its IPO quite expensive. It should have been cheaper. In such a situation, interested investors are expecting some correction after the listing.
GMP has fallen by 97%
The biggest reason behind the lukewarm response to Hyundai Motor India Limited IPO is the continuously falling prices of gray market premium i.e. GMP. Let us tell you that the share prices of Hyundai Motor India are continuously falling in the unlisted market. According to Investorgain.com, the GMP of this IPO has fallen by 97% in the last 20 days alone. The GMP of Hyundai IPO on 27th September was ₹570 and today on 17th October it has come down to ₹17. The premium at Rs 17 is indicating flat listing of GMP company’s shares. Because according to this, the shares of the company can be listed at (upper price band Rs 1960 + latest GMP 17) = Rs 1977. It is only 0.87% above the price band.
What do experts say?
According to most of the brokerage companies, Hyundai Motor’s IPO can be taken for the long term. Brokerage firms including Arihant Capital, ICICI Direct, KR Choksi Research, SBI Securities and IDBI Capital have given ‘Subscribe’ ratings to Hyundai Motor IPO. Apart from this, Anand Rathi Research, LKP Securities, Arihant Capital and Aditya Birla Money have recommended placing stakes in Hyundai Motor IPO for long term investment.
According to SMIFS Ltd, bets can be placed on Hyundai IPO. This is because it has a major market share in the SUV segment. Increase in production capacity and entry into the EV segment will positively boost future prospects. The brokerage firm says its future is bright with dominant market share in the SUV segment, premiumization of new EV models helping to improve revenues and margins, and launches in the PV segment. In such a situation, it is advisable to subscribe for a long term.
Hyundai Motor Plan
Tarun Garg, Chief Operating Officer (COO), Hyundai Motor India Limited, recently speaking to PTI on the issue of IPO, said, ‘We have been in India for more than 26 years. We have a very high market share. We are at second position in the passenger wheeler segment in India. He further said, ‘Our aim is to become India’s most trusted brand.’ He said, ‘India as a country is doing very well. Gross Domestic Product (GDP) growth is very good and is much higher than the global GDP growth rate. In the last three to four years, India has emerged as a very good destination for all major companies and the pace of growth has also accelerated.
