Business News

Mumbai: Investors looking to put money in Hyundai Motor India's mega initial public offering (IPO) - the country's largest ever - must be willing to hold the stock for at least a year to earn healthy returns. Analysts are not expecting a bumper listing by the country's second-largest car maker, with trends in the grey market pointing to a moderate opening.The grey market premium - the price over the IPO price in the unofficial market that investors pay for the shares before listing - for Hyundai was at ₹30 on Monday evening or 1.5% above the upper end of the issue price band of ₹1,865 to ₹1,960. The ₹27,870 crore issue opens on Tuesday and closes on Thursday. The grey market premium for Hyundai shares was at ₹370 on October 4."The grey market premium has declined in recent weeks due to heightened market volatility and dampening demand," said Krishna Appala, senior research analyst at Capitalmind Research. "In the short term, Hyundai may face limited growth prospects as increased competition continues to erode market share."114231397Analysts said the issue pricing does not leave a lot of room for a strong listing, as seen in other recent issues like Bajaj Housing Finance and Ola Electric Mobility. This makes the stock a better bet for investors willing to hold for at least a year."Although the issue appears fully priced, Hyundai is strategically positioned for substantial growth following its current expansion efforts, which may provide value in the long run," said analysts at Bajaj Broking Research. "We recommend investors consider holding their shares for the long term, ideally 1-3 years, to maximise potential rewards."Shashank Kanodia, assistant vice president of research at ICICI Direct, said that if held for over a year, the stock's returns could be in "double digits". "The company has a decent share of SUV (Sports Utility Vehicle) sales, which comprise 63% of its PV (Passenger Vehicles) sales domestically as of FY24 versus the industry share of 60% with leading market share in mid-SUV space."Investors could also consider waiting for the listing day, said some analysts. "Since it's a large issue, there would be many sellers on the listing day, and the shares could be available at lower prices," said Aniruddha Sarkar, CIO, Quest Investment Advisors.

Mumbai: The Reserve Bank of India may consider widening the scope of the Real Time Gross Settlement System (RTGS) to the settlement of transactions in US dollars, euros and pound sterling, governor Shaktikanta Das said on Monday.An expanded RTGS using major trade currencies would accelerate access to cheaper cross-border payments and remittances. The RBI has often spoken of the need for more cost-effective cross-border payment systems, with deputy governor T Rabi Sankar stating in September 2023 that the prevailing high costs for cross-border remittances were "simply unconscionable"."The feasibility of expanding RTGS to settle transactions in major trade currencies such as USD, EUR and GBP can be explored through bilateral or multilateral arrangements," Das said at the RBI@90 conference in New Delhi. "India and a few other economies have already commenced efforts to expand linkage of cross-border fast payment systems both in the bilateral and multilateral modes," he said.The RTGS, which is used to transfer funds between banks on a real-time basis, is maintained by the RBI.In July, the central bank unveiled the Project Nexus initiative to interlink the domestic instant payment systems of India with Malaysia, the Philippines, Singapore and Thailand. Cross-border payment linkages under bilateral pacts have already been set up with Singapore, the UAE, Mauritius, Sri Lanka and Nepal.Highlighting the potential of central bank digital currencies (CBDCs) to enable efficient cross-border payments, Das said harmonisation of standards and interoperability would be required to facilitate this process."A key challenge could be the fact that countries may prefer to design their own systems as per their domestic considerations. I feel we can overcome this challenge by developing a plug-and-play system that allows replicability of India's experience while also maintaining the sovereignty of respective countries," he said.