In a dream debut, LG Electronics India listed at a stellar 50% premium over its issue price of Rs 1,140, notching up a valuation of Rs 1.2 lakh crore. The stock listed on the BSE at Rs 1,715 a share. The previous record for highest listing premium was held by Coal India, whose IPO came way back in 2010The debut valued LG India above its South Korean parent’s roughly Rs 79,893 crore ($9 billion) market cap. The listing also put the firm way ahead of its local peers such as Whirlpool, Voltas, and Havells.
Parent LG had offered 15% of its shareholding in the Indian subsidiary through an offer for sale. India is the second market after South Korea where LG is listed. The proceeds will be repatriated by the parent. The Korean brand’s listing beat market expectations, as signalled by its grey market premium (GMP). Ahead of its listing, LG India shares were trading at Rs 1,562 apiece in the unofficial grey market, signalling a listing premium of 37%, according to stock market experts.
“The GST benefits, buzzing IPO market and a firm with a strong India operation came together during listing,” a senior official at NSE told FE on the sidelines of the listing ceremony. A Singapore-based lawyer who advised LG said that the company’s strong debut on the exchanges would likely lead to other Asian peers to explore the IPO market in India. LG is the second South Korean company to list on the Indian stock market after Hyundai Motor Company listed its local unit (Hyundai Motor India) last year. The listing premium for LG India came after it recorded one of the highest subscriptions ever for a large Indian IPO (Rs 10,000 crore and above), with its initial share sale oversubscribed 54 times. Bids were placed for 3,850 million shares compared to the 71.3 million shares on offer.
The IPO set a new record by attracting bids worth Rs 4.43 lakh crore at the top end of its price band of Rs 1,080 to Rs 1,140 per share. Most analysts had viewed the issue as attractively priced relative to peers and hence there was a robust demand for the same, they said.Brokerage firm Motilal Oswal on Tuesday said that India’s consumer durables market (excluding mobile phones) was estimated to post a compounded annual growth rate of 14% over CY24-29.
LG India, the brokerage said, was well-positioned to capitalise on this growth opportunity, given its leadership position in multiple categoriesICICI Securities stated that the recent reduction in GST rates, income tax and interest rates augured well for the growth of most durable categories in FY27-28E. LG India would benefit from this trend, it said.