Hyundai IPO: Aggressive Pricing and Market Conditions Lead to Low Retail Subscription 

Hyundai IPO: The IPO of Hyundai Motor India has been a disappointment to the retail investors due to the aggressive pricing and adverse conditions in the market. Hyundai IPO shares, which were initially trading at a promising premium of Rs 380 in the grey market, witnessed the premium dwindle to zero at the end of the last day of the IPO.

Although it is India's biggest IPO till date, Hyundai's issue was among the least subscribed issues above Rs 10,000 crore. Though issues witnessed only 2.37 times the shares on offer, QIBs dominated the total. The response from retail investors has been pretty lukewarm, with only 50% of the allotted shares subscribed.

The company said it would raise Rs 27,870 crore at the upper price band of Rs 1,865-1,960 per share, nearly double an earlier raise of Rs 25,000 crore. "It would have been great if there was some extra upside for the retail investor," said Ambareesh Baliga, associate vicepresident with capital markets at Pacific Investments. By contrast, Coal India and LIC saw discounting, which led to greater retail participation in the issue.

In the wake of these concerns being voiced by experts, Hyundai has lost market share and Kia's business is not doing anything to help the cause out of its Indian operations. General poor market conditions; indices dropped around 4% this month, which added to the decline in retail subscription rates.

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