Hyundai Motor India Shares Drop 1.5% on Weak Debut

Aakhir Tak – In Shorts:

Hyundai Motor India shares debuted with a 1.5% drop.
The IPO received a 2.37x subscription, with limited retail interest.
Experts remain optimistic about Hyundai’s long-term prospects.

Aakhir Tak – In Depth:

Hyundai Motor India shares made a disappointing debut on Tuesday, listing at a 1.5% discount to the issue price. The stock opened at ₹1,931 on the BSE and ₹1,934 on the NSE, falling short of the ₹1,960 issue price. Ongoing market volatility and concerns about the company’s valuation dampened investor expectations, despite prior warnings from analysts.

The ₹27,870 crore IPO closed with an overall subscription of 2.37 times, achieving full subscription only on the last day. Retail investors showed limited interest, subscribing to just 50% of their allotted shares. Institutional buyers, particularly Qualified Institutional Buyers (QIBs), played a crucial role, subscribing seven times their allocation. However, this institutional support wasn’t enough to avoid a weak debut.

Hyundai’s limited exposure to electric vehicles (EVs) and hybrids—only 11% of its current portfolio—has raised concerns about its ability to compete in a market rapidly shifting towards EVs. Moreover, the company’s constrained production capacity and a lack of new model launches have further subdued investor enthusiasm.

Despite the tepid start, analysts remain optimistic about Hyundai’s long-term outlook. With a 15% share in India’s passenger vehicle market and a commanding 63% share in utility vehicle sales, Hyundai’s position in key segments offers a robust foundation for growth. Brokerage firms such as ICICI Direct and Nuvama Wealth Management highlight Hyundai’s focus on expanding production capacity and localizing operations. Analysts suggest investors focus on Hyundai’s premiumization strategy and market expansion rather than short-term performance.