Check the GMP, subscription, broking review, and important dates for LG Electronics India's IPO.
Strong analyst support and a 24% grey market premium accompanied the opening of LG Electronics India's Rs 11,607 crore IPO for subscriptions. With a price range of Rs 1,080-Rs 1,140, the offer for sale indicates investor excitement for the company's market leadership, debt-free status, and appealing valuation in the face of robust, long-term consumer demand.
With a minimum bid size of 13 shares and a price range of Rs 1,080 to Rs 1,140 per share, the issue is valued at Rs 14,820 at the higher price range. High-net-worth individuals (HNIs) and institutions have higher allocation restrictions, while retail investors can bid up to Rs 2 lakh.
GMP and the mood of the market
With shares trading hands at over Rs 1,410 on the unofficial market, the IPO's grey market premium (GMP) of about 24% indicates robust early demand and expectations of a significant listing gain.
According to analysts, the issue has been priced sensibly in comparison to its peers, and it coincides with a robust resurgence in demand for consumer durables. Several brokerages have given LG positive recommendations due of its dominant market position and comfortable valuation.
SBI Securities pointed out that LG Electronics India's size, profitability, and robust domestic manufacturing base set it apart from its consumer durable counterparts.
With market leadership in a number of product categories, LG Electronics India is one of the biggest consumer electronics and home appliance firms in India. The issue is valued at a P/E multiple of 35.1x at the upper price range of Rs 1,140, which appears att.
In contrast to rivals trading at significantly higher multiples, the IPO is being offered at a fair valuation of 35x FY25 EPS. Centrum gave the IPO a Subscribe grade in light of the company's industrial prowess, global parent support, leadership position, robust brand, and wide distribution network.
With a robust EBITDA margin of 12.8% and PAT margin of 9%, the company reported a 46% increase in profit after tax to Rs 2,203 crore and a 14% increase in revenue to Rs 24,631 crore in FY25. With a strong ROCE of 43% and ROE of 37%, which indicate operational soundness, it is still debt-free.
What LG is doing well
1. strong market dominance in a variety of product categories, including air conditioners, TVs, and refrigerators.
2. High profitability and no debt.
3. competitive prices when compared to competitors in the consumer durables market.
4. increasing manufacturing capacity and bringing in fresh capital to establish India as a major base for global industry.
5. dependable brand value and parental assistance from LG Electric.
Outlook for investors
The issue has attracted strong interest because of its dominant industry position, steady growth, and attractive valuation, even though it is a pure OFS, meaning no new money will flow into the business. In the midst of a busy IPO calendar, analysts think the IPO's allure resides in its combination of brand strength, profitability, and affordable pricing.
The offering may reflect the optimism around India's premium consumption, with a 24% GMP and significant institutional participation anticipated.
Allotment is anticipated on October 10, and the subscription period will continue from October 7–9. The BSE and NSE have provisionally scheduled the listing for October 14.
