Hyundai Motor India's shares dropped 5 per cent in their market debut on Tuesday (Oct 22), after a tepid response from retail investors to the country's finest ever initial public offering over its pricing.
The stock listed at 1,934 rupees on the National Stock Alternate, in contrast to its offer impress of 1,960 rupees, and was closing purchasing and selling at 1,860 rupees at 0502 GMT, giving the firm a valuation of 1.51 trillion rupees (US$17.96 billion).
Hyundai, India's No 2 carmaker with a 15 per cent market allotment, was focusing on a valuation of US$19 billion by the IPO.
Its characterize US$3.3 billion IPO was oversubscribed bigger than two-fold closing week, led largely by institutional investors, nonetheless pricing concerns deterred participation by retail investors who timid they would not be in a inform to make beneficial properties on the listing.
"Hyundai's area has been stiffly priced and that appears to be weighing down on its listing as effectively. Moreover, the volumes considered to this point are driven only by institutional investors, and is extremely dejected for an IPO of Hyundai's dimension," said Arun Kejriwal, founder of Kejriwal Overview.
Tuesday's listing in Mumbai is Hyundai Motor's first such debut outside its house market of South Korea and comes at a time when India's equity markets have confidence risen sharply.
The 2-greatest IPOs earlier than Hyundai India - Life Insurance Company and Paytm father or mother One97 communications - every listed at steep discounts of 8 per cent and 9 per cent, respectively.
Total, only two of India's 10 finest IPOs have confidence outperformed the S&P CNX 500 index since listing, in preserving with a characterize published by Capitalmind closing week.
While Hyundai's market valuation is mighty smaller than Indian market leader Maruti Suzuki's US$forty five billion, analysts have confidence expressed concerns over the narrower gap when valued by their impress-to-earnings (P/E) ratios.
The subject had valued Hyundai at 26 cases its fiscal 2024 earnings, no longer a ways off the 29 cases plenty of for market leader Maruti.
Some important brokerages, nonetheless, peek lengthy term price in the stock.
Nomura began protection of Hyundai with a "buy" ranking and impress target of 2,472 rupees. The brokerage said it cherished Hyundai's excessive focus of SUVs in the portfolio, which formed 67 per cent of its sales in the April-June 2024 quarter.
Equally, Macquarie analysts began protection with an "outperform" ranking and impress target of 2,235 rupees, arguing that Hyundai's SUV-centric portfolio commanded a P/E top price.
Shares of rivals Maruti and Tata Motors were down 2 per cent. The Nifty Auto index was down 1.7 per cent.
Hyundai's listing comes as car sales uninteresting down in India after two years of characterize highs, with clients delaying purchases on worries about recalcitrant inflation.