India's largest IPO's debut on stock market on Tuesday

Hyundai Motors initial public offering (IPO), which opened for subscription on October 15 and closed on October 17, is all set to make its debut on the Indian stock market on October 22.

However, the Grey Market Premium (GMP) for Hyundai Motors indicates a downward trend ahead of its listing next Tuesday, potentially leading to a flat debut.

Hyundai Motors is currently trading at a premium of ₹45 in the grey market, just 2.3 percent higher than the IPO price ₹1960.

This means that the estimated listing price of Hyundai Motors is likely to be ₹2,005, according to market observers.

GMP not very enthusiastic

Hyundai Motors' GMP was +63 on the first day of its IPO, but it declined during the subscription period. By the last day of subscriptions on October 17, the GMP had dropped significantly, hitting -32 in the grey market, as per data by Investorgain. However, GMP of Hyundai Motors climbed to +5 on the allotment day, October 18.

According to the analysis by experts, the lowest GMP recorded is Re 0, and the highest GMP for any IPO is ₹570. The 'Grey market premium' indicates investors' readiness to pay more than the issue price. Grey market premiums are simply indicators of how the company's shares are valued in the unlisted market and can fluctuate quickly.

The ₹27,870 crore IPO, India's largest public offering to date, narrowly passed the final stages of the bidding process, driven primarily by strong demand from non-institutional investors. The retail and non-institutional investor segments of the issue were both undersubscribed.

Aimed to mop up Rs 27,000 cr

Hyundai Motor India's IPO price was fixed between ₹1,865 and ₹1,960 per share. The ₹27,870 crore offering was an offer for sale (OFS) of 14.22 crore shares, with no fresh issue component.

Half of the net public issue size (excluding the portion reserved for employees) is allocated to Qualified Institutional Buyers (QIBs), with up to 60 percent of that portion available for allocation to anchor investors. Additionally, 15 percent of the shares are set aside for non-institutional investors, while 35 percent are reserved for retail investors. The company has also allocated up to 7,78,400 equity shares specifically for its employees.

(By arrangement with livemint.com)