Why Hyundai India’s GMP crashed 76% even as market awaits India’s biggest IPO

The gray market premium (GMP) of Hyundai India continues to slip forward of the difficulty opening subsequent week. The corporate’s shares are at the moment commanding a GMP of round Rs 139, indicating a marginal premium of seven% over the difficulty value.

The IPO, which is a whole provide on the market (OFS) of 14.2 crore shares by the Korean mother or father, is priced within the vary of Rs 1,865-1,960. On the higher finish, the corporate is valued at Rs 1.6 lakh crore.

Two weeks in the past, the share value of Hyundai within the unlisted market was round Rs 570. Nevertheless, analysts famous that current market corrections and considerably costly valuations are contributing to a 76% dip over the previous two weeks.

“It’s true that the GMP has declined considerably attributable to current market corrections. Whereas this would possibly dampen the passion across the IPO within the brief time period, it doesn’t essentially replicate the long-term potential of Hyundai’s enterprise,” mentioned Abhishek Jain, Head of Analysis, Arihant Capital Markets.

This IPO will make Hyundai Motor India the primary automaker to go public in twenty years, following Maruti Suzuki’s itemizing in 2003.Though the whole proceeds from the IPO will go to the mother or father firm, administration said that the funds shall be used for analysis and growth in addition to new revolutionary choices.Hyundai is the second-largest carmaker in India, with a portfolio of 13 passenger car fashions throughout sedans, hatchbacks, and SUVs. The corporate goals to leverage its robust native manufacturing capabilities to ascertain itself as Hyundai Motor’s largest manufacturing base in Asia.It operates two manufacturing services in Chennai with a mixed put in capability of 824,000 models each year and is at the moment working at over 90% capability utilization.

For the quarter ended June 2024, Hyundai Motor India reported a income of Rs 17,344 crore, a rise from Rs 16,624 crore in the identical interval final 12 months. Of the entire income, 76% was derived from the home market, whereas exports accounted for twenty-four%.

The corporate’s web revenue for the quarter was Rs 1,489.65 crore, in comparison with Rs 1,329.19 crore within the earlier 12 months.

Kotak Mahindra Capital, Citigroup World, HSBC Securities, JP Morgan, and Morgan Stanley are the book-running lead managers for the difficulty, whereas KFin Applied sciences is the registrar for the provide.