Hyundai IPO Listing Letdown: Do Major IPOs Really Pay Off? A Zerodha Insight

Hyundai Motor India's IPO had a weak debut, listing at Rs 1,934, 1.32% below its offer price of Rs 1,960, and closing at Rs 1,819.60 — a 7.2% drop. Despite being oversubscribed over two-fold, retail investors were deterred by high valuations and concerns over future earnings. Stock brokerage firm Zerodha shared an insight into India's top 10 major IPO listings.

New Delhi: Hyundai Motor India's IPO failed to live up to the expectations as retail investors gave a lukewarm reception to the country's biggest-ever initial public offering (IPO). The IPO had a weak debut as it listed at Rs 1,934 on the National Stock Exchange (NSE), 1.32 per cent below the IPO price of Rs 1,960.

The shares fell 7.2% on their market debut on Tuesday with the stock closing at Rs 1,819.60 vs IPO price of 1,960 rupees.

Hyundai, the number two carmaker in India, has a market share of 15% and was targeting a valuation of $19 billion through the offering. Also Read: Why Hyundai India Failed To Light Up D-Street, Lists Below IPO Price Though the IPO was oversubscribed more than two-fold last week, all thanks to the institutional investors, it failed to impress the retail investors as the price of the shares was set too high compared to future earnings deterred retail investors who worried they would not be able to make gains on the listing, a Reuters report said. Hyundai's lacklustre outing has brought focus on big IPO listing and their successes.

Soon after Hyundai's poor show on IPO listing, Zerodha posted a list of major IPOs in India and how they have fared in terms of listing gains. "Only three of the 10 largest IPOs in India have managed to give listing gains," Zerodha pointed out in a post on X. According to Dealogic data, seven of India's 10 biggest IPOs have seen share price falls on their first days of trading.

This also includes Hyundai's IPO. Reasons Behind Hyundai's Weak Debut According to a Reuters report, citing experts, Hyundai's weak debut was the result of a high valuation, near-term weakness in car sales, and an increase in the royalty rate paid by the company to its South Korean parent. "Hyundai's issue has been stiffly priced and that seems to be weighing down on its listing as well," said Arun Kejriwal, founder of Kejriwal Research.

"Besides, the volumes seen so far are driven only by institutional investors, and is rather poor for an IPO of Hyundai's size." Get Latest News Live on Times Now along with Breaking News and Top Headlines from Markets, Business Economy and around the world..