Hyundai’s Record Indian IPO Draws Tepid Demand Ahead of Debut

Hyundai Motor India's initial public offering (IPO) has garnered mixed reactions from investors, with tepid demand ahead of its debut. The South Korean automaker aims to raise ₹27,870.16 crore ($34.3 billion) through the book-built issue, making it the largest IPO in the country, surpassing LIC's initial share sale of ₹21,000 crore ($25.6 billion).

The IPO, which opened on October 15 and closed on October 17, saw a slow start in the Indian stock market. On the first day of the bidding process, the Hyundai Motor India IPO saw an 18% subscription, with bids received for 1.77 crore equity shares compared to the 9.97 crore shares on offer, as per NSE data. On the second day, the subscription reached 42%, with retail investors subscribing to 38% of the portion, while non-institutional investors reached 26%. The qualified institutional buyers (QIBs) portion saw a subscription of 58%. The employee portion was subscribed 1.30 times.

The grey market premium (GMP) for Hyundai's IPO evolved during the subscription period, indicating investor sentiment. On the first day, the GMP was +17, indicating a premium of ₹17 in the grey market. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Hyundai Motor India share price was indicated at ₹1,977 apiece, which is 0.87% higher than the IPO price of ₹1,960.

The economic and market conditions in India played a role in shaping investor appetite for Hyundai's IPO. The Indian stock market has been volatile in recent months, with concerns about global economic slowdown and geopolitical tensions affecting investor sentiment. Additionally, the automobile sector has been facing headwinds due to regulatory changes and increased competition.

In conclusion, Hyundai Motor India's record-breaking IPO has drawn tepid demand ahead of its debut, with investors cautious about the current market conditions and the automobile sector's challenges. The GMP trend and subscription status indicate a mixed response from investors, with the final subscription and allotment status yet to be determined.