New Delhi: For some time now, it has become a trend among investors to invest in every Initial Public Offering (IPO). Many people completely ignore fundamentals in pursuit of listing gains. But, if you invest according to the size of the IPO, you may have to suffer a loss. Common investors definitely need to understand this.

On Tuesday, the country's second largest car company Hyundai Motor India is going to enter the stock market for the first time and once again the drum of the biggest IPO is being beaten in the market. Hyundai's initial public offering (IPO) will open on October 15. The size of this IPO can be Rs 27,870 crore.

Of course, Hyundai is currently the second largest carmaker in India, the world's third largest car market. It also has long-term plans for India. Still, it should be remembered that in the past, companies like DLF Limited, Reliance Power, Paytm marketed their IPOs as the country's biggest IPOs, but investors who invested in them suffered losses.

Investors got disappointed with DLF

DLF, a famous company in the real estate sector, branded its IPO as the biggest issue in the year 2007. The size of its IPO was Rs 9,187 crore. This issue was oversubscribed by almost three and a half times, but there was not much enthusiasm for the shares reserved for retail investors.

The IPO price was fixed at Rs 525 per share. After about five years, the company decided to buy back at the rate of Rs 600 per share. DLF made its all-time high of around Rs 1200 in the year 2008. But, despite the passage of 16 years, it could never reach that level again. Currently, DLF shares are trading around Rs 850.

Reliance Power is also in bad shape

Reliance Power of Anil Ambani, younger brother of billionaire businessman Mukesh Ambani, brought an IPO worth Rs 11,563 crore in 2008. The company also promoted it as the country's largest IPO. The issue was subscribed 72 times. The share price for retail investors was fixed at Rs 430 per share.

But, Reliance Power's entry into the stock market was very bad. It could never even reach its issue price. Even now, the situation of Reliance Power is not very good. It is embroiled in many legal disputes. Its share price had fallen to Rs 1 in the year 2020. Currently, Reliance Power is trading around Rs 45.

Paytm also made me bankrupt

There was a lot of discussion about the IPO of domestic fintech company Paytm. Its IPO came in 2021 at a price of Rs 2,150. Senior officials of Paytm said that they could have kept the issue price of their shares even higher. But, they wanted the IPO investors to also earn some money. But, Paytm entered the stock market with a 9 percent discount. There was a further decline on the day of listing and it closed at 1,564.

It fell to a low of Rs 310 in May 2024. However, it bounced back from there and is currently trading around Rs 700. However, it still has to double the journey to reach its listing price.

The only exception is Coal India

The IPO of the government coal company Coal India came in the year 2010. However, this IPO was a part of the government's disinvestment program. The issue size was Rs 15,200 crore. The IPO was subscribed 15 times and the share of Rs 245 was listed at a price of Rs 287.75. Currently, the price of its shares is close to Rs 500.

However, Coal India has only doubled in the last 14 years. Many stocks have given multibagger returns during this period. Considering the pace of the Indian stock market, Coal India's returns cannot be called attractive.

Expert opinion on Hyundai's IPO

Hyundai's IPO will open from October 15 to October 17. Its price band is Rs 1,865-1,960 per share. The lot size will be 7 shares. Brokerage companies have advised investing in Hyundai Motor India's (HMIL) IPO for the long term. A dozen brokerage companies like ICICI Direct, Anand Rathi, Bajaj Brokerage, Aditya Birla Capital, SBI Securities have advised investing in Hyundai's IPO for the long term in their reports.

However, the grey market premium (GMP) of Hyundai's IPO has reduced significantly. Its initial GMP was more than Rs 1 thousand. But now its GMP has crashed suddenly. Currently, Hyundai's GMP is indicating a listing gain of only 3 percent i.e. around Rs 65.  

Santosh Meena, head of research at Swastika Investment Ltd, said, "Investors will be as excited about Hyundai's IPO as they were about Maruti Suzuki's IPO two decades ago. The problem is that many big IPOs have already come and investors will have to decide where to stay and where to stay away."