Hyundai Motor India’s shares dropped more than 4% on their trading debut, following the company’s historic $3.3 billion initial public offering (IPO). On Tuesday, shares opened on the Bombay Stock Exchange (BSE) at 1,876 rupees, down from their issue price of 1,960 rupees. The IPO, which raised a record 278.56 billion rupees ($3.3 billion), is the largest-ever public offering by amount raised in India.
The automaker offered 142.19 million shares at a price band between 1,865 and 1,960 rupees per share. Despite the stock’s initial decline, the IPO had been oversubscribed more than two times during its subscription window from October 15 to October 17, highlighting strong demand from investors. This IPO marks a significant milestone as it is the first public offering for a unit of the South Korean automaker outside of its home country.
Kranthi Bathini, director of equity strategy at Wealthmills Securities, explained to CNBC’s “Capital Connection” that the IPO was “fully subscribed and also fully priced in,” leaving little immediate upside for investors. However, he added that the company’s long-term fundamentals and valuations make Hyundai Motor India a solid investment for the medium to long term.
Bathini noted Hyundai’s robust presence in the Indian market, having operated in the country for nearly three decades. This long-standing experience has allowed the automaker to gain deep insights into Indian consumer behavior and government policymaking, giving it a strong foothold. Hyundai’s diverse and well-tailored portfolio further strengthens its position in India, offering vehicles that cater specifically to local drivers’ preferences and needs.
The IPO was structured as an offer for sale, meaning that Hyundai Motor India did not issue new shares, but rather, its parent company, Hyundai Motor Company, sold part of its existing stake. The company’s stock debuted on both the National Stock Exchange (NSE) and BSE, adding further liquidity to the stock.
The lead bookrunners for the IPO included prominent financial institutions such as Kotak Mahindra Capital, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), J.P. Morgan India, and Morgan Stanley India.
The IPO market in India has been showing strong momentum, with analysts predicting a record-breaking year for public offerings. Neil Bahal, founder of Negen Capital, expressed optimism about India’s IPO prospects, citing supportive policies from the Securities and Exchange Board of India (SEBI) and robust retail participation as key factors driving this surge.
Despite Hyundai’s initial dip, experts remain bullish on the Indian IPO market’s overall potential for growth, with equity markets benefiting from strong fundamentals and broad-based opportunities.
