Hyundai India IPO Falls Flat Amid Pricing Concerns

Hyundai Motor India's shares declined 5% on the first day after its largest-ever IPO opened with mixed investor responses due to pricing concerns. Although initially promising, the offering lagged due to retail hesitation, pointing to an uncertain listing debut amid a hot Indian market.

Hyundai Motor India's much-anticipated market debut saw its shares drop by 5% after the substantial $3.3 billion IPO failed to captivate retail investors due to pricing concerns. The stock began trading at 1,934 rupees on the National Stock Exchange, falling short of its offer price of 1,960 rupees, and hit 1,860 rupees by 0502 GMT, marking a valuation of 1.51 trillion rupees ($17.96 billion).

Despite oversubscription driven by institutional investors, retail investors were unconvinced about potential earnings, mirroring a trend set by other large IPOs like Life Insurance Corporation and One97 Communications. Hyundai's listing in Mumbai marks its first outside of South Korea and comes at a time when Indian equity markets are on the rise.

Analysts noted Hyundai's ambitious valuation at 26 times its projected fiscal 2024 earnings, close to Maruti Suzuki's 29 times, although some brokerages see long-term value. Nomura initiated coverage with a 'buy' rating at a price target of 2,472 rupees, while Macquarie rated it 'outperform' with a target of 2,235 rupees, emphasizing the premium of its SUV range.

(With inputs from agencies.)