LG India surpasses Korean parent in market value after IPO
What's the story
LG Electronics India's shares soared by 50.4% on their trading debut today, valuing the company at $13.07 billion (approximately ₹1.15 lakh crore). The stellar performance of the Indian subsidiary has surpassed its South Korean parent's market capitalization of nearly $10 billion (around ₹8,800 crore). The IPO was heavily oversubscribed and received bids worth a staggering $50 billion, highlighting investor confidence in India's consumer demand and manufacturing growth prospects.
Market performance
LG Electronics India posts stellar debut
Shares of LG Electronics India debuted at ₹1,710.1 on the National Stock Exchange of India and quickly climbed to ₹1,714.90. The company's issue price was set at ₹1,140 per share. This marks the best stock market debut for a billion-dollar IPO since Eternal (then Zomato) in 2021 and is also India's second-busiest quarter on record for IPOs with WeWork India and Tata Capital posting lackluster debuts recently.
Competitive edge
Debut valuation exceeds $8.73 billion target
The debut valuation of LG Electronics India has exceeded its target of $8.73 billion and surpassed the market caps of its India-listed peers such as Whirlpool (valued at about $1.67 billion), Voltas (valued at $5.16 billion), and Havells (valued at $10.42 billion). The company's listing performance is being hailed as a major success in the consumer space, with HDFC Securities MD and CEO Dhiraj Relli calling it "solid fundamentals, reasonable valuations and sector-leading growth prospects."
Investor interest
IPO oversubscribed within hours of opening
The $1.3 billion IPO of LG Electronics India was heavily oversubscribed within hours of opening last week. Qualified institutional buyers bid 166.5 times their allotted quota, while non-institutional and retail investors subscribed 22.4 times and 3.54 times, respectively, according to exchange data. The overwhelming response from investors has made it the most subscribed billion-dollar offering in nearly two decades, surpassing interest seen in high-profile listings such as Life Insurance Corp of India's $2.7 billion issue in 2022 and Paytm's $2.5 billion debut and Zomato's $1.3 billion flotation in 2021.