LG Electronics India is aiming for an impressive valuation of up to 774 billion rupees (approximately $8.71 billion) as it launches its long-awaited initial public offering (IPO), marking one of the largest offerings in India so far this year. Following a strong showing on its market debut, LG Electronics India experienced a remarkable 50% surge in its share price on Tuesday, reflecting a significant demand from investors.
The IPO was priced at the upper end of its range, between 1,080 rupees and 1,140 rupees per share, ultimately fetching 116 billion rupees (around $1.3 billion). With an overwhelming oversubscription rate exceeding 54 times, the IPO attracted bids amounting to approximately 4.4 trillion rupees, or nearly $50 billion, according to exchange data. This represents the most substantial demand for an Indian IPO since the Reliance Power listing in 2008, according to Pranav Haldea from PRIME Database.
Institutional investors were particularly keen, with qualified institutional buyers bidding 166 times their available allotment, while the retail investor segment was oversubscribed by a factor of 3.55. This IPO was structured as an offer for sale, with no new shares created, as LG Electronics itself sold 101.8 million shares. The offering was managed by a consortium of account holders, including Morgan Stanley, J.P. Morgan, Axis Capital, BofA Securities, and Citigroup Global Markets India.
Shares began trading on both the National Stock Exchange of India and the Bombay Stock Exchange. This marks a significant moment for the South Korean conglomerate, as LG Electronics India follows in the footsteps of fellow South Korean firm Hyundai Motor India, which completed its own listing in October.
As a subsidiary of LG Electronics, the Indian unit specializes in a comprehensive range of consumer electronics and home appliances. These include popular products such as refrigerators, air conditioners, washing machines, and smart home devices. Himanshu Dugar, an independent equity research analyst registered with SEBI, highlighted LG Electronics India’s leading position in the market, noting the breadth of its offerings across various categories.
Furthermore, India’s electronics and appliances market is on a growth trajectory, with projections indicating an increase from approximately $75 billion in 2024 to an estimated $130 billion to $150 billion by 2029, as noted by Redseer Strategy Consultants. Dugar emphasized the favorable conditions for LG Electronics India, which stands to gain significantly from this expected market expansion.
The Indian IPO landscape remains vibrant, with recent reports from EY indicating that India recorded 146 offerings in the third quarter alone, raising $7.2 billion. This brings the total for the first nine months of the year to 254 deals worth $11.8 billion, underscoring the robust nature of the country’s capital markets, supported by a notable IPO returns rate of 17.5%.
