Hyundai Motor India, the second-largest car manufacturer in the country, faced a disappointing start on the stock exchanges, with shares plummeting by over 7% on its debut day, October 22. This sharp decline caught the attention of investors who had eagerly anticipated the company’s entry into the market following a historic IPO that raised ₹27,870 crore, making it the largest initial public offering in Indian history.

On its debut, Hyundai Motor India shares opened at ₹1,934, which was a 1.3% decrease from the issue price of ₹1,960 on the National Stock Exchange (NSE). Throughout the trading session, the stock demonstrated considerable volatility, peaking at an intraday high of ₹1,970 before sinking to a low of ₹1,807. Ultimately, it closed at ₹1,819.60, reflecting a 7.16% drop from its opening price.

The scenario was similar on the Bombay Stock Exchange (BSE), where shares finished at ₹1,820.40, down 7.12% after hitting a day's high of ₹1,968.80 and a low of ₹1,870.05. The trading volume for Hyundai Motor India was significant, with 2.86 crore equity shares changing hands on the NSE and 15.86 lakh shares traded on the BSE.

The valuation of Hyundai Motor India now stands at approximately ₹1.47 lakh crore, down from ₹1.59 lakh crore at the time of the IPO. This substantial decline reflects the market's cautious sentiment regarding the automotive sector, especially in the wake of recent economic fluctuations.

The IPO, which was fully an offer-for-sale of 14.21 crore equity shares by its parent company, Hyundai Motor Company, was priced within a band of ₹1,865 to ₹1,960 per share. As a result, all proceeds from the IPO, excluding expenses, went to the promoter, Hyundai Motor Company. This arrangement underscores the strong backing of Hyundai's parent firm, indicating their long-term commitment to the Indian market.

After the IPO, Hyundai Motor Company retains an 82.50% stake in Hyundai Motor India, while the remaining 17.5% is held by public shareholders. Among the institutional investors, domestic institutional investors own 5.78% of the shares, with HDFC Mutual Fund (1.73%) and Life Insurance Corporation of India (1.21%) being the largest shareholders. Foreign institutional investors hold a 7.36% stake, while retail investors account for 3.86% of the total shareholding. The diverse shareholder base highlights the widespread interest in Hyundai Motor India, although the disappointing debut may lead to questions about future performance.

Despite the initial disappointment, Hyundai Motor India is likely to play a pivotal role in shaping the future of the Indian automotive landscape. The company is well-positioned to leverage its strong brand reputation, extensive dealer network, and commitment to innovation, especially in electric vehicles (EVs) and advanced automotive technologies. As the Indian government increasingly promotes EV adoption, Hyundai's investments in sustainable mobility could enhance its growth prospects.

Investors will be keenly watching Hyundai Motor India's performance in the coming months, especially as the company navigates the challenges posed by fluctuating demand, supply chain disruptions, and increasing competition in the automotive sector.

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