Hyundai Motor India Shares Fall 5% After Listing: Buy, Sell, or Hold?

Shares of Hyundai Motor India tumbled nearly 5% to Rs 1,844.6 on the NSE following a weak market debut on Tuesday. The stock opened at Rs 1,934, a discount of Rs 26 or 1.3% compared to the IPO price of Rs 1,960, marking a 6% decline from the issue price.

"Hyundai Motor India Limited’s IPO listed at Rs 1,934, reflecting a 1.33% loss, which was largely in line with expectations. The subdued grey market premium (GMP) of Rs 67 (3.42%) before listing hinted at limited enthusiasm for listing gains. The fully priced valuation also contributed to the muted debut," said Shivani Nyati, Head of Wealth at Swastika Investmart.

Despite the discounted listing, Nyati emphasised that Hyundai Motor India's strong fundamentals, as the second-largest passenger vehicle manufacturer in India with a strategic focus on the SUV segment, support its long-term growth prospects. She added that investors with a long-term view may consider holding the stock, as its competitive market position and product innovations could drive future performance.

Global brokerage Nomura initiated coverage on Hyundai Motor with a 'Buy' rating and set a target price of Rs 2,472. "The company is leveraging style and technology, and its ongoing premiumisation should fuel high-quality growth. With India’s car market penetration at just 36 cars per 1,000 people, Hyundai Motor India has significant growth potential. Key catalysts include capacity expansion in H2 and the launch of new models, including four EVs over the next 3-4 years," Nomura stated.

Macquarie also initiated coverage with an 'Outperform' rating and a target price of Rs 2,235. It praised Hyundai’s market share stabilisation and its favourable portfolio mix, noting the automaker’s premium positioning and powertrain capabilities as strong growth drivers.

Hyundai Motor India's Rs 27,870 crore IPO was oversubscribed 2.3 times, with full subscription only on the final day. The IPO was entirely an offer for sale (OFS) of 14.2 crore shares by parent company Hyundai Motor Global, meaning all proceeds will go to the selling shareholder. However, Hyundai management stated that the funds will be used for research and development, along with new innovative offerings.

Historically, Hyundai Motor has maintained a strong market presence in India, enjoying consumer loyalty due to its smooth and affordable after-sales service. Equipped with R&D from Korea and automated production in Chennai, the company has optimised its operations while expanding distribution. It also aims to strengthen its position in the growing electric vehicle segment.