Hyundai Motor India’s Stock Market Debut Falls Short
On October 22, 2024, Hyundai Motor India Limited (HMIL) made its debut on the stock market, but the shares opened below their issue price. On the Bombay Stock Exchange (BSE), the stock started at Rs 1,931, which is 1.5% lower than the issue price of Rs 1,960. Similarly, on the National Stock Exchange (NSE), shares listed at Rs 1,934. After the initial trading, the share price dropped further by 3%.
The initial public offering (IPO) of Hyundai Motor India, which is the largest in India, raised Rs 27,870.16 crores by selling 14.22 crore shares. The IPO was priced between Rs 1,865 and Rs 1,960 per share, with the final price set at Rs 1,960. The subscription period was from October 15 to October 17, and shares were allotted on October 18, with credits to demat accounts on October 21.
Shivani Nyati, Head of Wealth at Swastika Investmart Ltd., commented on the situation, stating that despite the discounted listing, Hyundai’s strong fundamentals and focus on the SUV segment support its long-term growth. She advised investors with a long-term view to consider holding the stock due to Hyundai’s competitive market position and product innovations.
Several factors may have contributed to the weak debut, including volatile market sentiment and investor caution due to global economic uncertainties. Additionally, since the IPO was an offer for sale, the proceeds did not aid business expansion, possibly affecting investor interest.
Doubts Revealed
Stock Market Debut -: This means the first time a company’s shares are available for people to buy and sell on the stock market.
Issue Price -: The issue price is the price at which a company’s shares are offered to the public during an IPO.
BSE -: BSE stands for Bombay Stock Exchange, which is one of the largest stock exchanges in India where people can buy and sell shares.
NSE -: NSE stands for National Stock Exchange, another major stock exchange in India where shares are traded.
IPO -: IPO stands for Initial Public Offering, which is when a company first sells its shares to the public to raise money.
Offer for Sale -: An offer for sale is a way for existing shareholders to sell their shares to the public, rather than the company issuing new shares.
Volatile Market Sentiment -: This means that the feelings and reactions of investors in the market are unpredictable and can change quickly, affecting share prices.
Swastika Investmart Ltd -: This is a financial services company in India that provides advice and services related to investments.