Hyundai's IPO: A Rocky Start Amid High Valuations and Industry Slowdown

Hyundai Motor India's stock dropped 7.2% on its market debut due to high valuation concerns and an automotive industry slowdown. Despite being oversubscribed, the IPO's share pricing deterred retail investors. Analysts noted the weak performance as a reflection of market conditions and valuation challenges.

Hyundai Motor India's market debut saw its shares tumble 7.2% as retail investors showed little enthusiasm for the country's largest-ever IPO, raising doubts about the company's ambitious valuation amid a sluggish automotive sector.

The shares opened below the offer price of 1,960 rupees and closed at 1,819.60 rupees, providing a company valuation of 1.48 trillion rupees ($17.6 billion). This dip highlights ongoing concerns over future earnings and raised investor apprehensions about achieving gains.

Despite oversubscription by institutional investors, Hyundai's IPO follows a pattern seen in other major offerings in India, where initial losses have ranged widely. Analysts point to the IPO's high valuation, declining car sales, and an increased royalty rate as key factors impacting investor sentiment.

(With inputs from agencies.)