Hyundai IPO GMP drops sharply ahead of listing in coming week

Business Business: Hyundai Motors’ initial public offering (IPO), which opened for subscription on October 15 and closed on October 17, is all set to make its debut in the Indian stock market on October 22. However, the grey market premium (GPM) for Hyundai Motors indicates a decline ahead of its listing next Tuesday, potentially leading to a flat debut.

According to InvestorGain, Hyundai Motors is currently trading at a premium of ₹45 in the grey market, which is only 2.3 per cent higher than its IPO price of ₹1960. This means that the estimated listing price of Hyundai Motors is likely to be ₹2,005, according to market observers. The lowest GMP is recorded at ₹0 and the highest GMP is ₹570, according to analysis done by experts at InvestorGain.com. The ‘grey market premium’ reflects the readiness of investors to pay more than the issue price.

However, it is important to note that grey market premiums are only indicators of how a company’s shares are valued in the unlisted market and can fluctuate rapidly. The ₹27,870 crore IPO, India’s largest public offering ever, narrowly passed the final stage of the bidding process, driven mainly by strong demand from non-institutional investors. Both the retail and non-institutional investor segments of the issue were undersubscribed. Hyundai Motor India’s IPO was priced between ₹1,865 and ₹1,960 per share. The ₹27,870.16 crore offering was an offer for sale (OFS) of 14.22 crore shares, with no fresh issue component.

Half of the net public issue size (excluding the portion reserved for employees) is allocated to qualified institutional buyers (QIBs), of which up to 60 per cent is available for allocation to anchor investors. In addition, 15 per cent of the shares are set aside for non-institutional investors, while 35 per cent of the shares are reserved for retail investors. The company has also allotted 7,78,400 equity shares exclusively for its employees.