Mumbai, Maharashtra, India – Hyundai cars parked outside a Hyundai showroom in Mumbai.
Sopa Images | Light Rocket | Getty Images
Hyundai Motor India’s $3.3 billion initial public offering (IPO), the country’s largest ever, saw its shares fall more than 4% on its first day of trading on Tuesday.
The shares traded lower at Rs 1,876 from the IPO price of Rs 1,960, Based on BSE data.
The automaker provides 142.19 million shares, priced in the range of INR 1,865 ($22.18) to INR 1,960. The IPO raised 278.56 billion rupees, or $3.3 billion.
The company’s IPO opened on October 15 and closed on October 17, and was oversubscribed by more than twice. Reuters. This is the first time a subsidiary of a South Korean automaker has conducted an initial public offering outside South Korea.
Kranthi Bathini, director of equity strategy at Wealthmills Securities, said in an interview with CNBC’s “Capital Connection” that since this is a “fully subscribed and fully priced IPO, there is nothing left for investors to consider.”
However, looking at Hyundai Motor India’s fundamentals and valuation, “it’s a better option in the medium to long term than in the short term,” he added.
Badini also pointed out that unlike other automakers, Hyundai has been in the Indian market for about three decades and the company “understands Indian policymaking” as well as Indian drivers and consumers. Hyundai’s product portfolio is “robust” for the Indian market, he added.
Unlike a traditional IPO in which a company sells new shares, Hyundai Motor India’s IPO is an offer for sale, in which parent Hyundai Motor Co. sells its shares.
The company’s shares began trading on the National Stock Exchange and Bombay Stock Exchange on Tuesday.
Leading bookrunners for the Modern India IPO include Kotak Mahindra Capital, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), JPMorgan India and Morgan Stanley India.
In June this year, analysts told CNBC that they were optimistic about the Indian IPO market, with Neil Bahal, founder of Negen Capital, saying that he expected “India to have a record-breaking year with a large number of IPOs.” and private equity exits”.
“The IPO is not because some technology companies think they should raise money from the stock market instead of private equity. The fundamentals of the stock market are amazing, SEBI (Securities and Exchange Board of India) supportive policies, retail participation and broad-based investment based on opportunities,” he added.
—CNBC’s Amala Balakrishner contributed to this article.
About The Author
