Hyundai India IPO: What GMP volatility indicates ahead of listing

Hyundai India IPO listing is scheduled for tomorrow, Tuesday, October 22, 2024. The IPO allotment has been finalized on Friday, October 18, 2024. For those who have been allocated shares, the shares will be credited to their demat accounts today, October 21. Additionally, the refund process for those who did not receive shares will also be completed today, October 21. Here’s what you need to know about the Hyundai India IPO listing tomorrow and the impact of GMP under pressure.

Hyundai India IPO Listing Tomorrow

On the final day of subscription, Thursday, October 17, Hyundai India IPO received a subscription of 2.37 times, according to BSE data. The qualified institutional buyer (QIB) segment was oversubscribed 6.97 times, while the non-institutional investor (NII) quota saw 0.60 times subscriptions. The retail individual investor (RII) quota was oversubscribed 0.50 times, and the employee quota received 1.74 times subscriptions. The company aims to raise INR 27,870.16 crore through an offer for sale, with shares priced between INR 1,865 and INR 1,960 each, and a minimum bid of 7 shares per lot, with a minimum application amount of INR 13,720.

In the Hyundai India IPO, 15% of the shares are allocated for NIIs, 35% are designated for retail investors, and 50% are reserved for QIBs. Additionally, shares are reserved for employees, who are also being offered a nearly 10% discount.

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Hyundai India IPO GMP

Investors are also considering the market opportunity and the unique premium of the manufacturer and the largest exporter of passenger vehicles company about to enter the market. Let’s examine what the GMP for Hyundai India IPO has indicated in the last few days ahead of its listing.

Over the past eighteen days (30 Sep – 21 Oct), the average grey market premium (GMP) for Hyundai India IPO was INR 196 per share. Nevertheless, it has been on a decline and even went into negative territory before recovering with today’s GMP being nil, according to IPOCentral’s GMP tracker.

The grey market premium (GMP) for the Hyundai India IPO has been on a rollercoaster, reflecting investors’ growing uncertainty as the October 22, 2024, listing approaches. Once peaking at a strong 20.4% on September 30, the GMP nosedived to around -0.5% by October 19. This sharp drop hints at a potentially lackluster debut, with a possible listing price falling below the IPO’s upper limit of INR 1,960. Analysts are bracing for a subdued opening for the company. Accordingly, the Hyundai India IPO listing may be a muted affair or negative as the premiums may decline further.

The term “Grey market premium” signifies the willingness of investors to pay a price higher than the initial offering price. While trading in this parallel market is not recognized by stock exchanges, the grey market has worked reasonably well to anticipate listing prices. Most recently, shares of KRN Heat Exchanger and Bajaj Housing Finance had strong starts on their stock market debuts, as indicated by the grey market.

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Hyundai India IPO Details

Hyundai Motor India is a well-known name and has claimed the title of second largest auto OEM in the Indian passenger vehicles market since Fiscal 2009 in terms of sales volumes. The company has consistently been the largest auto OEM in India by sales volume in the mid-size SUV sub-segment from Fiscal 2019 to the first 11 months of Fiscal 2024. Creta had a market share of 30% in the mid-size SUV sub-segment while Verna was the top-selling model in the premium sedans sub-segment with 31.2% market share, in the first 11 months of Fiscal 2024.

Hyundai Motor India has a wide portfolio of passenger vehicles that offer “something for everyone”. This portfolio consists of 13 passenger vehicle models across segments, including sedans (Aura and Verna), hatchbacks (Grand i10 NIOS, i20, and i20 N Line), and SUVs (Exter, Venue, Venue N Line, Creta, Creta N Line, Alcazar, Tucson and IONIQ 5).

The company’s Chennai plant had an installed capacity of 770,000 units by the end of FY 2023, up from 758,000 units in FY 2022. The capacity utilization rates were 94.45% and 79.96% in FY 2023 and FY 2022, respectively. Manufacturing capacity utilization has faced disruptions due to various factors such as regulatory inspections, natural disasters, and strikes. For instance, the operations were suspended for safety reasons during the COVID-19 lockdowns in fiscal 2021 and 2022, leading to underutilization of capacity.

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Hyundai India IPO Listing FAQs