Hyundai India shares list at 1.5% discount: Should you sell?
Hyundai Motor India's shares debuted on the stock exchanges today, opening at a 1.5% discount to the issue price. The stocks listed at ₹1,931 on the BSE and ₹1,934 on the NSE, a tad below their issue price of ₹1,960. This comes after the company's initial public offering (IPO) worth ₹27,870 crore was subscribed 2.3 times over its final day of bidding.
Hyundai's market position and IPO size
Shivani Nyati, Head of Wealth at Swastika Investmart, weighed in on Hyundai's market position and the potential impact of its IPO size. She said that "while Hyundai Motor India holds a strong market position as the second-largest passenger vehicle company in India, and its strategic focus on SUVs is promising, the overall market sentiment and IPO size may limit listing gains."
Hyundai's market share and pre-listing trading
Master Capital Services also emphasized on Hyundai's huge market share in India. The firm said that "Hyundai Motor India is the second-largest automobile manufacturer in India, holding a 15% market share." They also added that "the company's shares at pre-listing are trading at a GMP of just over 3% higher than its original price band," suggesting investor interest ahead of the official listing.
Hyundai's long-term investment potential and market strategy
Despite the modest immediate listing gains, analysts suggest that Hyundai's strong fundamentals make it an attractive long-term investment. The company has a history of maintaining a stable share market in India and enjoys customer loyalty due to its efficient after-sales service. With R&D support from Korea and an automated factory in Chennai, Hyundai has optimized operations while expanding distribution.
Hyundai's future plans and growth prospects
Hyundai also plans to slowly establish itself as a major player in the electric vehicle (EV) segment. This move, along with its dominance in India's passenger vehicle market, highlights the company's long-term potential. Nyati advised that "investors with a long-term outlook and the ability to navigate potential listing challenges may consider holding onto their investments post-listing for potential future growth."
Hyundai's IPO details and use of proceeds
The IPO was completely an offer for sale (OFS) of 14.2 crore shares, offloaded by Hyundai Motor Global, the parent company of Hyundai Motor India. Accordingly, all proceeds from the IPO will go to the selling shareholder. Nevertheless, management has assured that funds will be allocated toward research and development as well as innovative new offerings.
