It would not surprise anyone if the GMP falls to negative before the listing, given the sharp fall over the past few days.
The issue was booked 11% so far on the first day with retail investors being the highest bidders at 19% subscription in the category. The category reserved for non-institutional investors was booked just 8%.
There is a near consensus among analysts that subscribing to Hyundai IPO will be a strong play for long-term investors in the growing passenger vehicle market as consumers increasingly prefer bigger and premium cars.
As many as 10 analysts advised investors to subscribe to the IPO for the long term.
However, the premium PE valuation of 26x its FY25 earnings means that short-term investors may be in for disappointment, given the current GMP and valuation talk.
Hyundai has ensured to maintain a stable share market in India historically. It enjoys loyalty among Indian consumer base owing to smooth and affordable after-sales service.
Equipped with R&D from Korea and an automated factory in Chennai, the company has been able to optimise its operations while expanding its distribution. The automaker also plans to gradually become a major player in the EV segment.
"We believe the company can take advantage of the PV market in India with its diverse offerings. We have a Subscribe for long- term rating for the issue," said Arihant Capital.
The issue is completely an offer for sale (OFS) of 14.2 crore shares, which will be offloaded by the company's parent Hyundai Motor Global. Since the IPO is an OFS, all the proceeds will go to the selling shareholders.
Even though the entire proceeds from the IPO will go to the parent company, the management said funds will be used for research and development and new innovative offerings.
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