Hyundai Motor India to list tomorrow, GMP enters green territory
Oct 21, 2024, 14:56 IST
India's biggest-ever IPO, the Hyundai Motor India's issue worth Rs 27,870.16 crore, is set to list on the NSE and BSE tomorrow. The offer, open for subscription between October 15th and 17th, largely saw muted demand from retail investors, who subscribed 0.5x to the issue.
QIBs (qualified institutional buyers), who made a thumping oversubscription of around 6.97x to the issue, swooped in on the last day to take its total subscription to around 2.37x, or 237%.
In the meantime, Hyundai Motor India's GMP (grey market premium) also witnessed significant volatility, nosediving heavily before the issue's close. After plunging to a negative Rs 32 on the day of the issue's close, it swung into the green a day after allotment but inched only up to a lowly Rs 5 on October 18th, 2024, i.e., on the day of allotment.
As of October 21, 2024, the company's GMP was Rs 67, with the estimated listing price now at Rs 2,027, data from the IPO website Chittorgarh showed. The markets now anticipate a listing day gain of about Rs 3.42% per share. Again, this is a dip from yesterday, when the company's GMP was at Rs 95, meaning that the markets were hoping for listing gains of about 4.85% per share.
Hyundai's GMP peaked at Rs 570 on September 27, 2024, post which it continued to decline rapidly. On October 15th, 2024, when the issue opened for subscription, Hyundai Motor India's GMP was Rs 63. On October 17, 2024, i.e., on the day Hyundai's subscription was set to close, the GMP even dipped into negative, slipping beyond 0, indicating potential listing day losses for investors.
Remember that GMPs are only indicative and not concrete indicators of the stock's performance on the listing day. As seen in this case, GMPs can swing wildly from day to day and should not be your sole factor in deciding whether you want to invest in a stock.
While most experts have recommended subscribing to Hyundai Motor India's issue from a long-term viewpoint, short-term investors are likely to stay more cautious. This is because at a PE (price-to-earnings) valuation of 26x its potential FY25 earnings, Hyundai's PE is higher than even the industry's PE average, which currently stands at 24.41 times.
Moreover, the PE of the Indian subsidiary of the South Korean automobile giant is higher than even that of its parent company, which is at 5x. That, combined with weak auto sales projected for the upcoming quarter, i.e., October to December 2024, may take away some sheen from the debut of the stock of the second-largest automobile seller in the country.
Per experts at research advisory firm Master Capital Services Ltd, "Hyundai Motor India is the second-largest automobile manufacturer in India, holding a 15% market share. Despite some concerns regarding short-term listing gains due to subdued grey market premium, the company offers steady growth prospects amid industry tailwinds, robust financials and healthy SUV product demand. Hyundai’s leadership in India's passenger vehicle market, along with its strategic focus on electric vehicles, makes a compelling investment for long-term investors."
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QIBs (qualified institutional buyers), who made a thumping oversubscription of around 6.97x to the issue, swooped in on the last day to take its total subscription to around 2.37x, or 237%.
In the meantime, Hyundai Motor India's GMP (grey market premium) also witnessed significant volatility, nosediving heavily before the issue's close. After plunging to a negative Rs 32 on the day of the issue's close, it swung into the green a day after allotment but inched only up to a lowly Rs 5 on October 18th, 2024, i.e., on the day of allotment.
As of October 21, 2024, the company's GMP was Rs 67, with the estimated listing price now at Rs 2,027, data from the IPO website Chittorgarh showed. The markets now anticipate a listing day gain of about Rs 3.42% per share. Again, this is a dip from yesterday, when the company's GMP was at Rs 95, meaning that the markets were hoping for listing gains of about 4.85% per share.
Hyundai's GMP peaked at Rs 570 on September 27, 2024, post which it continued to decline rapidly. On October 15th, 2024, when the issue opened for subscription, Hyundai Motor India's GMP was Rs 63. On October 17, 2024, i.e., on the day Hyundai's subscription was set to close, the GMP even dipped into negative, slipping beyond 0, indicating potential listing day losses for investors.
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While most experts have recommended subscribing to Hyundai Motor India's issue from a long-term viewpoint, short-term investors are likely to stay more cautious. This is because at a PE (price-to-earnings) valuation of 26x its potential FY25 earnings, Hyundai's PE is higher than even the industry's PE average, which currently stands at 24.41 times.
Moreover, the PE of the Indian subsidiary of the South Korean automobile giant is higher than even that of its parent company, which is at 5x. That, combined with weak auto sales projected for the upcoming quarter, i.e., October to December 2024, may take away some sheen from the debut of the stock of the second-largest automobile seller in the country.
Per experts at research advisory firm Master Capital Services Ltd, "Hyundai Motor India is the second-largest automobile manufacturer in India, holding a 15% market share. Despite some concerns regarding short-term listing gains due to subdued grey market premium, the company offers steady growth prospects amid industry tailwinds, robust financials and healthy SUV product demand. Hyundai’s leadership in India's passenger vehicle market, along with its strategic focus on electric vehicles, makes a compelling investment for long-term investors."