Hyundai Motor had a lacklustre Indian market debut on Tuesday after raising $3.3 billion in the country鈥檚 biggest-ever initial public offering, with shares closing 7.1 per cent down from their issue price.
A booming stock market in the world鈥檚 fifth-largest聽economy聽has stoked an IPO frenzy over the last two years, with start-ups and established companies alike scooping up billions of dollars from investors.
The IPO had valued Hyundai鈥檚 India unit, the country鈥檚 second-largest car maker by sales, at about $19 billion, with the South Korean parent firm putting up a 17.5-per cent stake for purchase.
Shares of the automaker fell in the first day of trade on the Mumbai bourse to 1,820 rupees ($21.65), down from their issue price of 1,960 rupees.
鈥極ur journey in India began in 1996... and now, 28 years later, we are going public by launching India鈥檚 largest IPO in history,鈥� Hyundai Motor Group executive chair Euisun Chung said at the listing ceremony in Mumbai.
鈥楩rom the beginning, we knew that India was the future,鈥� he added. 鈥楾oday鈥檚 IPO... demonstrates our commitment to this great nation.鈥�
While shares in Hyundai Motor India鈥檚 IPO were oversubscribed more than two times, retail investors snapped up only half the tranche reserved for them.
Some analysts had noted that the company鈥檚 valuation could limit listing gains.聽
Mihir Manek of Aditya Birla Capital said prior to the listing that while Hyundai鈥檚 outlook in India 鈥榗ontinues to be strong鈥�, the offering was at a 鈥榬ich valuation鈥�.
Other concerns that dogged the IPO included a decline in urban consumer sentiment hitting India鈥檚 automobile sales.
Retail vehicle sales fell by more than nine per cent in September, with the Federation of Automobile Dealers Associations saying car yards had reached 鈥榟istorically high inventory levels of 80-85 days鈥�.
Hyundai made a splash in India during the late 1990s and early 2000s with its popular small cars and sedans.
The automaker has more recently seen success with larger models, including strong demand from Indian customers for its sports-utility vehicle the Creta.
It is one of the few foreign car companies to have left a mark on the world鈥檚 most populous country, with US rivals Ford and General Motors having struggled in their efforts to gain a market toehold.
Hyundai Motor India managing director Unsoo Kim told reporters two weeks ago that the South Korean firm would use the IPO capital to invest in 鈥榥ew products鈥� and research and development.
