SUMMARY
Hyundai Motor India Share Price: Hyundai Motor India shares debuted at ₹1,934 a unit on the NSE at a discount of 1.32% to the issue price of ₹1,960 per share. On the BSE, it is listed at a discount of 1.48% at ₹1,931 apiece.
Table of Contents
Hyundai Motor India Share Price Live Update at 03:30 pm: Shares of Hyundai Motor India settled 4.6% lower at ₹1,845 apiece after listing at a discount of 1.3% on Tuesday
Why is Hyundai’s Stock listed below the issued price
Analysts said Hyundai’s weak debut reflected 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.”
The Mumbai listing is Hyundai Motor’s (005380. KS)first outside South Korea. The IPO was the world’s second-largest this year.
“Price, of course, will always be determined by the investors,” Hyundai India’s Chief Operating Officer Tarun Garg told reporters when asked about the market reaction.
He also dismissed concerns over the royalty rate increase to 3.5% from 2.5%, terming it “in line with market benchmark”.
While Hyundai’s market valuation is much lower than Indian sector leader Maruti Suzuki’s (MRTI.NS), $45 billion, analysts point to a narrower gap in their price-to-earnings (P/E) ratios.
INDUSTRY SLOWDOWN
Shares of Indian rivals have also slipped in recent weeks as car sales slow after two years of record highs, with customers delaying purchases amid stubborn inflation.
Hyundai’s sales in India in April-September fell 2.6% from the same time a year earlier, while overall car sales rose just 0.5%, according to the latest industry data.
Garg, however, said the recent slowdown was “nothing to worry too much” over, attributing it to seasonality, and he expects the industry to rebound.
Maruti’s shares fell 2.1% on the day, while Tata Motors (TAMO.NS), dropped 2.6%, with the Nifty Auto index (.NIFTYAUTO), down 2.5%.
Hyundai Motor plans to use proceeds from the sale of a 17.5% stake in the Indian unit to invest in research and launch new products as it competes with Tata Motors and Mahindra & Mahindra (MAHM.NS),
“We shall leverage our deep understanding of consumer preferences to successfully expand our passenger vehicle portfolio,” Garg said at the listing ceremony.
LONG-TERM BET
Some major brokerages see long-term value in the stock.
Nomura started coverage of Hyundai with a “buy” rating and a price target of 2,472 rupees. The brokerage said it liked the large number of SUVs in Hyundai’s product range, which accounted for 67% of sales in the April-June quarter.
Macquarie analysts began coverage with an “outperform” rating and price target of 2,235 rupees, saying Hyundai’s focus on SUVs commanded a P/E premium.
source:https://www.reuters.com/