Hyundai Motor India's shares jump 5% on second day, making up for dull debut

Shares of newly listed Hyundai Motor India Ltd. (HML), the Indian arm of South Korean automaker giant Hyundai, jumped 5% today, a day after India's biggest-ever IPO worth Rs 27,870.16 crore made a lackluster debut on the bourses. As of 2:15 pm today, HMIL's shares were trading at Rs 1,910.00 on NSE, up by 4.97%.

On BSE, shares of HMIL were also up by 4.76%, trading at Rs 1,907. The IPO had a price band of Rs 1,865-1,960 per share. Yesterday, Hyundai Motors India experienced a muted debut on the exchanges, opening at Rs 1,934 or a discount of Rs 26, or 1.3%, below the issue price of Rs 1,960. The dull debut resulted in listing day losses worth 7.16% for investors.

The stock slipped even further to close the day at Rs 1,819.6, about 6% below the issue price. The stock opened today at Rs 1,815.20.

Retail investors were largely unenthusiastic about this IPO, subscribing only 0.5x to the offer. The issue sailed over and managed to get a 2.37x subscription thanks to QIBs (qualified institutional buyers), who pitched in and oversubscribed around 700% to the issue.

This is despite the IPO being the first share sale in India in over 2 decades. The last time an automobile giant rolled their wheels into Indian markets was in 2003, when Japanese carmaker Maruti Suzuki came with its IPO worth Rs 993.35 crore.

Mega IPOs, dud returns

While HMIL's IPO was the biggest initial share sale in the country, even surpassing LIC's initial share sale of Rs 21,000 crore, it continued the trend of mega-IPOs delivering subpar returns. Data suggests that only 3 out of India's biggest-ever IPOs managed to deliver positive listing day gains. Even LIC's listing had yielded listing-day losses of about 7.75% for investors.

Only Coal India's issue worth Rs 15,199 crore, which opened for subscription in 2010, and Zomato's issue worth Rs 9,375 crore in 2021 have managed to duck this trend. While Coal India's debut delivered listing day gains worth 39.73%, Zomato yielded a staggering 65.59% debut gain for its investors.

In the last decade, DLF's IPO worth Rs 9,187 crore, which came in 2007, resulted in listing day gains of about 8.58% for its investors.