• Hyundai Motor India's IPO has disappointed investors due to stagnant sales and a continuous decline in stock value.
• Despite being the second-largest car company in India, Hyundai's domestic market growth is significantly lower than the average.
• The company's extensive network and significant market share have not prevented the stock from underperforming.
• The future of Hyundai and its stock performance will be closely watched as it remains a significant player in the Indian automobile market.

Hyundai Motor India, the country's largest Initial Public Offering (IPO), has been a disappointment for investors since its public listing. The stock has been on a continuous decline, closing at Rs 1,829 on Tuesday, which is about 7% below the issue price of Rs 1,960. This decline in stock value has been attributed to the lack of growth in the company's sales.

In October, Hyundai Motor India sold 55,568 vehicles in the domestic market, a mere 0.80% growth on an annual basis. This growth rate is significantly lower than the average market growth of 1.82%. In the same period the previous year, the company had sold 55,128 vehicles, indicating a stagnant sales performance.

The company's stock was listed on October 22, opening at Rs 1,931, a decline of 1.47% from the issue price. Since then, the stock has been on a downward trajectory. Despite this, the company's Rs 27,870 crore IPO received a mixed response from investors, with subscriptions more than doubling.

Hyundai's Market Position and Financial Performance

Hyundai Motor India holds the position of the second-largest car company in the country, following Maruti Suzuki India. As of June 2024, the company's market share was around 14%. In the financial year 2023-24, the company sold 7.77 lakh vehicles, 21% of which were exported to countries like Latin America, Africa, the Middle East, and Europe.

The company's extensive network in India includes 1,550 service outlets and 1,366 sales outlets. In the financial year 2023-24, Hyundai Motor India's revenue was Rs 69,829 crore, with a profit of Rs 6,060 crore, and a margin of 13.1%. In the first quarter of the financial year 2024-25, the company's revenue was Rs 17,344 crore, with a profit of Rs 1,489 crore, and a margin of 13.5%.

The Indian stock market indices faced selling pressure at the opening, with both indices opening with a marginal dip on Wednesday. The Nifty 50 index opened at 25,008.55 points, down by 48.80 points or 0.19%, while the BSE Sensex lost 173 points or 0.21%, opening at 81,646 points during the opening session.

Market Response and Future Outlook

Experts have highlighted that the continuous selling by Foreign Institutional Investors (FIIs) is being supported by buying from domestic investors, which may consolidate the Nifty index around 25,000.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, "In India, the main driver of the bull run has been the sustained domestic flows into the market which has been absorbing all the selling by FIIs. The domestic flows will continue to support the market but elevated valuations will put a cap on the upside."

Nifty is likely to consolidate around 25000 levels. Q2 earnings will be weak except in IT, banking and pockets of autos.

In the sectoral indices on the National Stock Exchange, except for Nifty Pharma, Nifty Realty, and Nifty Consumer Durables, all other indices opened in the negative. This indicates a general trend of cautiousness among investors.

The IPO of Hyundai Motor India was subscribed over two times on the last day. According to the latest data (provisional), the reserve portion for the Qualified Institutional Buyers (QIB) was subscribed 6.94 times, non-Institutional Investors (NII) subscribed 0.57 times, and retail investors subscribed 0.48 times.