Hyundai Motor India shares drop 3% after underwhelming stock market debut

Hyundai Motor India Limited (HMIL) saw a disappointing debut on the stock market on Tuesday, with its shares listing below the issue price, as per ANI.

On the Bombay Stock Exchange (BSE), the stock opened at ₹1,931, which was lower than the issue price of ₹1,960, reflecting a decline of 1.5%. Meanwhile, on the National Stock Exchange (NSE), shares were listed at ₹1,934. Following the initial trading, Hyundai's share price fell further, ending with a 3% drop, ANI reported.

Hyundai Motor India’s Initial Public Offering (IPO), which was one of the largest in India, raised ₹27,870.16 crore through an offer for sale of 14.22 crore shares. The pricing range for the IPO was set between ₹1,865 and ₹1,960 per share, with the final issue price at the top end of the band at ₹1,960. The subscription period for the IPO was open from October 15 to October 17, according to ANI.

The shares were allotted to successful bidders on October 18, and subsequently credited to their demat accounts by October 21. Hyundai’s stock began trading on both the BSE and NSE on October 22, 2024.

Shivani Nyati, Head of Wealth at Swastika Investmart Ltd., shared her views on the situation, noting that despite the discounted listing, Hyundai Motor India’s strong fundamentals, being India’s second-largest passenger vehicle manufacturer with a strategic focus on the SUV segment, bode well for its long-term growth. Nyati further stated, "Investors with a long-term outlook may want to hold onto the stock, as Hyundai’s competitive position and product innovations are expected to drive future performance," as per ANI.

Despite Hyundai's strong market presence and financial health, several factors likely contributed to the subdued debut. The broader market has been experiencing volatility, with investors demonstrating caution towards new listings amid global economic uncertainties and fluctuations in the Indian market, ANI reported.

Another potential factor affecting investor sentiment was the structure of the IPO. Since it was designed as an offer for sale, the funds raised through the IPO did not contribute to business expansion, which might have dampened enthusiasm for the stock, according to ANI.

Hyundai’s listing comes at a time when the Indian stock market is grappling with mixed signals, and investors are weighing their options more carefully than usual. However, Hyundai’s established position in the automotive market and its growth strategy focusing on the popular SUV segment may still present opportunities for long-term investors. 

(With inputs from ANI)