If you were watching the Indian markets in mid-October 2024, it was impossible to miss the noise. Hyundai Motor India was launching a massive $3.3 billion IPO. It was the biggest the country had ever seen. Everyone expected a gold rush. But then, the Hyundai IPO subscription status started trickling in, and things felt... different.
Honestly, the final numbers were a bit of a reality check.
While the issue did sail through, it wasn't the landslide victory many retail investors are used to seeing. The final Hyundai IPO subscription status stood at 2.37 times. Now, for a ₹27,870 crore issue, "subscribed" is technically a win. But when you peel back the layers, you see a massive divide between the big institutional players and the average person on the street.
The Final Numbers Breakdown
Let's look at how the different groups actually behaved. It's kinda fascinating because the Qualified Institutional Buyers (QIBs) basically carried the entire team on their backs.
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- Qualified Institutional Buyers (QIBs): These guys went big. They subscribed 6.97 times their allotted quota.
- Non-Institutional Investors (NIIs): This group, mostly high-net-worth individuals, was much more cautious, coming in at just 0.60 times.
- Retail Individual Investors (RIIs): This is the part that shocked everyone. The retail portion was only 0.50 times subscribed.
- Employees: Interestingly, the staff were more optimistic, subscribing 1.74 times, likely helped by the ₹186 per share discount they were offered.
Why Did Retail Investors Stay Away?
It’s rare to see a brand as famous as Hyundai struggle to fill its retail quota. Usually, Indian retail investors jump at the chance to own a piece of a global giant. So, what went wrong?
Basically, it came down to two things: money and structure.
First, the valuation. The price band was set between ₹1,865 and ₹1,960. At the top end, the company was valued at roughly 26 times its FY24 earnings. Many analysts, including those from firms like Kejriwal Research, pointed out that this wasn't exactly "cheap." When compared to its parent company in South Korea, which trades at a much lower P/E ratio, the Indian arm looked expensive.
Then there’s the "Offer for Sale" (OFS) factor.
In this IPO, 100% of the shares were being sold by the parent company. Not a single rupee of the ₹27,870 crore was going into Hyundai India’s bank account for building new factories or R&D. It was all going back to Seoul. Retail investors generally prefer "Fresh Issues" where the money stays in the business to fuel growth.
The Listing Day Reality Check
Because the Hyundai IPO subscription status was so lopsided, the grey market premium (GMP) absolutely collapsed. At one point, people were predicting a healthy pop, but by the time the shares actually hit the BSE and NSE on October 22, the GMP had fallen to zero.
The stock debuted at ₹1,931 on the BSE, which was a 1.47% discount. It didn't get much better from there. By the end of the first day, the price had slumped over 7%, closing around ₹1,819.
It was a tough pill to swallow for those who did subscribe.
Is It Still a Good Long-Term Bet?
Despite the rocky start and the lukewarm subscription, you can't ignore the fundamentals. Hyundai is the second-largest carmaker in India. They have a massive 15% market share. They are the "king of SUVs" with the Creta and Venue.
Expert opinions are actually quite split here.
Brokerages like Macquarie initiated coverage with an "Outperform" rating and a target price of over ₹2,200. They argue that Hyundai’s premium positioning and its aggressive push into Electric Vehicles (EVs)—like the upcoming Creta EV—make it a winner over a 3-to-5-year horizon. On the flip side, some experts worry about the 3.5% royalty the Indian unit has to pay the parent company forever. That’s a lot of cash leaving the books every year.
Practical Next Steps for Investors
If you're currently holding Hyundai shares or thinking about buying the dip, here's how to look at it:
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- Check Your Horizon: If you wanted a "listing pop" or a quick flip, that ship has sailed. This is now a "coffee can" style investment. You hold it for years, not weeks.
- Watch the SUV Segment: Keep an eye on monthly SIAM (Society of Indian Automobile Manufacturers) data. If Hyundai continues to lose share to Mahindra or Tata in the SUV space, the stock might stay under pressure.
- The Talegaon Factor: Hyundai recently acquired the old General Motors plant in Talegaon. Once that goes live in 2025/2026, their production capacity will jump significantly. This is a major catalyst to watch.
- Wait for Quarterly Results: Before adding more to your position, wait to see their first few sets of earnings as a listed company. It will reveal how they handle the current slowdown in the Indian auto market.
The Hyundai IPO subscription status taught us a valuable lesson: even the biggest brands can't ignore the sentiment of the small investor if the price isn't right. It was a "too big to fail" issue that technically succeeded but left a lot of retail participants feeling glad they sat this one out.