Hyundai Motor India IPO Prospects Dim in Gray Market Trading (1)

India’s unregulated gray market is indicating that the excitement around Hyundai Motor India Ltd.’s $3.3 billion initial public offering— poised to be the country’s biggest ever — is cooling.

Shares of Hyundai Motor Co.’s unit traded Monday at a premium of just 60 rupees over 1,960 rupees ($23.30) apiece — the high end of its IPO price range — in the gray market, according to its participants. That’s versus a premium of as high as 1,000 rupees about two weeks ago, the traders said.

The carmaker’s share sale bolsters the country’s reputation as one of the busiest ...