Hyundai Motor IPO:The much-awaited initial public offering (IPO) of Hyundai Motor India (HMIL) will open for bidding on Tuesday, October 15. Valued at Rs 27,856 crore, it marks the largest IPO in the history of the Indian stock market.
The issue price is set between Rs 1,865 and Rs 1,960 per share, with a minimum lot size of seven shares. The bidding window will remain open until Thursday, October 19.
The IPO is the first by an Indian automaker since suzuki maruti It was in 2003. Hyundai’s South Korean parent, Hyundai Motor Company, has waited more than two decades to bring this offering to the Indian market. This is an entirely ‘offer for sale’ (OFS) issue, with up to Rs 14.21 crore on offer, leading to a market capitalization of approximately Rs 1.6 lakh crore.
Despite initial enthusiasm, Hyundai’s gray market premium (GMP) has steadily declined. Recently, the GMP was Rs 65 per share, indicating a modest potential trading gain of 3 per cent for investors at the upper end of the price band. GMP had been much higher, trading at Rs 150 to Rs 175 per share before the weekend, but has plummeted to double digits in recent days. In early October, GMP had even touched Rs 500 and around Rs 350-375 when the issue was officially announced.
While some market experts consider the IPO to be fairly priced, they believe it could generate solid returns in the long term, thanks to Hyundai’s established track record. However, the OFS-only nature of the offer has raised concerns as all proceeds from the sale will flow to the parent company in South Korea, leaving the Indian subsidiary without financial benefits.
SFOs’ lofty valuations and structure have left investors cautious, especially amid broader market volatility. There are also concerns about loss of liquidity in the Indian market due to the large size of the issue.
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