Hyundai Motor Co.’s Indian unit is set to launch its $3.3 billion initial public offering (IPO), but it has not been met with the anticipated enthusiasm from investors. In just two days, only 42% of the shares in Hyundai Motor India Ltd. have been subscribed, signaling a lukewarm response to India’s largest-ever IPO.
The lackluster demand for the IPO, combined with weak trading in the gray market, has dampened expectations for the stock’s debut. The underperformance of Indian equities in recent weeks, coupled with shifting investor focus to China’s stimulus prospects, has further impacted the IPO’s reception.
Despite the slow start, there is still potential for the listing of India’s second-largest carmaker by sales to gain traction. Large IPOs in India often see a surge in subscriptions on the final day, especially as retail investors catch up with institutional interest. The institutional portion of Hyundai’s IPO has received bids for 58% of the shares, while the retail portion garnered 38% interest.
Analysts remain optimistic about the IPO’s success, with Astha Jain from Hem Securities Ltd. expressing confidence that the issue will proceed as planned. However, Jain notes that the high valuation of the shares may be deterring some investors, particularly retail traders looking for quick returns.
Prior to the IPO launch, Hyundai raised approximately 83.2 billion rupees ($990 million) by offering shares to anchor investors at the top end of the price range. Notable buyers include BlackRock Inc. and Baillie Gifford, as reported by Bloomberg News. The proceeds from Hyundai’s IPO will contribute to the record-breaking year for Indian IPOs, which have already raised over $12 billion in 2024.
As Hyundai Motor India prepares for its stock market debut on October 22, the success of the IPO will be closely watched amid a challenging market environment. With other major debuts on the horizon, including Swiggy Ltd. and NTPC Ltd.’s renewable-energy arm, the Indian IPO landscape is poised for further developments in the coming months.
