Hyundai flop show, Largest IPO disappointed investors

posted by Nilesh waghela 

Mumbai: Hyundai India performed flop show on D-stree as iwdely expected. This largest IPO disappointed investors, following the path of earlier largest IPO's. in their times! 

Hyundai India's IPO launched with a loss, despite high ratings from multiple brokerages. Shares fell up to 6%. However it recovered later to some extent. It is to be noted that previous large IPOs like Paytm and LIC also faced similar debuts. High IPO size and valuations were major factors. 

Despite all this, we also have to take a note that, Hyundai remains strong due to its market position and strategic focus on the SUV segment. But Market wonders that despite three brokerages - Nomura, Macquarie, and Motilal Oswal - initiating coverage on the stock with buy ratings on Day 1 itself, shares of Hyundai India debuted with a loss, and fell up to 6% from the IPO issue price.

Market sources said, At Rs 27,856 crore, Hyundai IPO is the largest public issue in India to date. The previous two IPOs which also had the largest tag had a similar fate. Vijay Shekhar Sharma's Paytm IPO, which was worth Rs 18,300 crore, ended Day 1 with a loss of 27.25% when it was listed in November 2021.

Later in May 2022, LIC's Rs 20,557 crore IPO—the largest before Hyundai hit the market—also ended with nearly an 8% loss on debut.

In fact, out of the seven largest IPOs prior to Hyundai's, only one—Coal India—generated a profit for investors on listing day. All the others—LIC, Paytm, GIC Re, SBI Cards, Reliance Power, and The New India Assurance—recorded losses.

Why did history repeat itself with Hyundai? Market eperts sites the reasons, a significant factor is the large IPO size; a higher public float results in increased supply of shares, which can negatively affect share prices.