Hyundai's Hurdle: A Bumpy IPO Ride

Hyundai Motor India's IPO listed below its offer price due to retail investor skepticism over its steep pricing. Marketed at $3.3 billion, the launch faced challenges with competition from Indian rivals and macroeconomic headwinds. Despite a strong institutional backing, the market debut didn't impress retail investors.

On Tuesday, Hyundai Motor India faced a challenging debut on the stock market, with shares dropping 6% from the offer price. The initial public offering, amounting to a record $3.3 billion, came amid concerns over high pricing, especially among retail investors who found the valuations steep.

Institutional investors had significantly oversubscribed the IPO, but retail interest dwindled. The stock opened at 1,934 rupees, below its set price of 1,960 rupees, further declining to 1,882.10 rupees shortly after trading began. Arun Kejriwal of Kejriwal Research noted that heavy pricing hampered retail investor engagement in the offering.

Despite stiff competition from local players like Tata Motors, Hyundai Motor plans to invest in research and new products. The auto giant remains optimistic, with analysts forecasting potential growth driven by its SUV-dominant lineup. Nomura and Macquarie have shown confidence, awarding Hyundai with favorable ratings and future price targets.

(With inputs from agencies.)