Hyundai IPO Listing Date Approaches as GMP Drops: What Does This Mean for Investors?

Hyundai IPO Listing Date Details

As Hyundai Motor India’s highly anticipated initial public offering (IPO) is set to list on the Indian stock exchanges on October 22, the Grey Market Premium (GMP) has shown a notable decline ahead of the listing, raising concerns among investors about its performance on debut.

Hyundai IPO: GMP Trends and What It Signals

The Hyundai Motors IPO, which was open for subscription between October 15 and October 17, initially received strong interest, with the GMP starting at ₹63 on the first day of its offering. However, during the subscription period, the premium saw a significant drop, hitting -₹32 by the closing date. As of the allotment day on October 18, the GMP slightly recovered to +₹5, indicating a lukewarm sentiment in the grey market.

As of now, Hyundai Motors is trading at a premium of just ₹45 in the grey market, representing only a 2.3% increase over the IPO price of ₹1,960. This suggests a possible listing price of ₹2,005, giving investors limited upside potential based on the grey market’s projections. While the GMP indicates how shares are valued in the unlisted market, it can be a volatile and unreliable measure, often shifting based on market sentiment.

Understanding the Hyundai IPO Offering

Hyundai Motor India’s IPO is a historic one, marking India’s largest public offering to date, with a massive size of ₹27,870 crore. The IPO consisted entirely of an offer for sale (OFS) of 14.22 crore shares, with no fresh issue component. The price range for the IPO was set between ₹1,865 and ₹1,960 per share.

Out of the total public issue, half was allocated to Qualified Institutional Buyers (QIBs), with up to 60% of that portion reserved for anchor investors. Non-institutional investors (NIIs) were allocated 15%, while retail investors were given 35% of the shares. The company also set aside up to 7,78,400 shares for its employees, allowing them to participate in the offering.

What Does the GMP Crash Mean for Investors?

The decline in the grey market premium could signal a flat listing for Hyundai Motors on October 22. While GMP often indicates investor sentiment before a listing, it is not a definitive predictor of actual performance. The recent drop in GMP may have been influenced by lower-than-expected demand from retail and non-institutional investors, as both segments were undersubscribed during the bidding process.

Investors should keep in mind that while the IPO’s size and potential are significant, the GMP fluctuations highlight that the broader market conditions and actual listing day performance could differ. Investors are advised to approach with caution and assess long-term growth prospects instead of short-term GMP movements.

Read More: Hyundai IPO Subscription Status 2024: A Comprehensive Guide

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