Why Indian Investors are Ignoring Asia’s Record-breaking IPO in 2024!

In the buzz surrounding the sale of the world’s second-largest IPO of 2024, Hyundai Motor India is gearing up for trading, despite facing a lukewarm response from retail investors. The $3.3 billion listing of Hyundai Motor India has been met with a cautious reception, shedding light on the broader picture of car sales in India amid economic uncertainties.

1. Retail Investors Hold Back:

• Retail investor interest in the Hyundai IPO remained subdued with only 50 per cent subscription in the Mumbai offering.
• Valued at $19 billion, the Korean carmakers’ India unit was priced at about 26 times its earnings, leaving many investors hesitant.
• The institutional backing was relatively stronger, with Singapore’s government and large investment firms like BlackRock and Fidelity showing interest.

1. Indian Debut:

• The 17.5 per cent stake sale by Hyundai marks the third largest IPO in India in dollar terms and the largest in Asia in 2024.
• Despite this, the Indian IPO market has seen significant activity this year, with blockbuster floats like Bajaj Housing Finance making a splash.

1. Hyundai’s Plans:

• Hyundai aims to utilize the IPO proceeds to bolster its presence in India with plans to expand production and introduce new EV models.
• The company has had a successful run in India compared to other foreign carmakers, positioning itself as a key player in the market.

1. Economic Landscape:

• The Indian automobile industry, like other sectors, is facing challenges due to inflation and a slowing economy.
• Market indicators like the Nifty Auto Index and Bajaj Auto’s share performance reflect the current pressures on the industry.

The Hyundai IPO in India is a notable move for the company, signaling a strategic shift from traditional markets like China. As Hyundai invests in expanding its capacity in India, it reflects the country’s growth potential as a significant player in the global automotive market. This listing is not just about shares; it’s about carving a new path and building a sustainable future in the Indian automotive landscape.