Huge decline in Hyundai Motor India’s GMP
Hyundai IPO GMP: Hyundai India Motor’s IPO has opened for subscription. This is India’s largest IPO, under which the company will raise Rs 27,870.16 crore. The company has fixed the price range of Rs 1865 to Rs 1960 for each share under its IPO. This IPO is completely OFS based, under which the promoters of the company will issue a total of 14,21,94,700 shares with a face value of Rs 10. There has been a continuous decline in the GMP price of this biggest IPO of India for the last several days.
GMP price fell from Rs 570 to Rs 45
The GMP price of Hyundai India Motor IPO has fallen by 89 percent and the premium of shares in the gray market has fallen from Rs 570 to Rs 45 (3 percent). But the biggest question is, what happened that Hyundai Motor India shares stopped getting prices in the gray market?
fully ofs
Hyundai Motor India’s IPO is completely OFS based, in which the company’s parent company Hyundai of South Korea will sell 14.21 crore shares. The Indian unit i.e. Hyundai India will not get any income from this IPO. This simply means that the money coming from this IPO will not be immediately used for the development of the Indian unit.
high valuation
Hyundai Motor India has fixed the upper price range of Rs 1960 for the shares, many experts believe that the pricing of the shares is too high. Hyundai is demanding a PE of 26x its FY25 earnings, while Maruti Suzuki is trading at 22x PE of its FY25 earnings. The PE being demanded by Hyundai India is higher than the industry average of 24.41x. Not only this, the PE of Hyundai Motor India’s parent company is only 5x.
Possible problems in manufacturing
Hyundai Motor India currently manufactures all its passenger vehicles and parts at its Chennai plant. If there is any problem or interruption in manufacturing after the start of manufacturing at the Talegaon plant in Maharashtra, it may have a negative impact on the overall results and financial conditions of the company.
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