LG Electronics India has recorded one of the highest subscriptions ever for a large Indian IPO (Rs 10,000 crore and above), with its initial share sale subscribed 54 times. Bids were placed for 385 crore shares compared to the 7.13 crore 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. These subscription figures surpassed the Rs 3.2 lakh crore bids received by Bajaj Housing Finance in 2024.
With a subscription rate of 54 times, this IPO is the most subscribed large Indian offering since Reliance Power’s IPO in 2008, which was subscribed over 70 times for Rs 10,123 crore.
In comparison, India’s largest IPO to date, Hyundai Motor India Ltd’s Rs 27,859 crore issue last year, was subscribed only 1.93 times, while LIC’s Rs 20,557 crore IPO had a 2.05-times subscription. Other recent large IPOs include Paytm’s Rs 18,300 crore offering in November 2021 which got subscribed 1.45 times, while Tata Capital’s Rs 15,512 crore IPO, which also closed this week, was booked 1.95 times.
"Investors seem to have preferred LG Electronics India, where they expect better listing gains and strong near-term growth prospects thanks to the government's tax cuts," said Prashanth Tapse, senior vice president of research at Mehta Equities.
For the LG IPO, the portion for Qualified Institutional Buyers (QIBs) got subscribed a huge 166.51 times, while the non-institutional investors quota received 22.44 times subscription. The category for Retail Individual Investors (RIIs) attracted 3.54 times the subscription.
The IPO, which was also the 8th biggest in the Indian equity market, was entirely an offer-for-sale by the South Korea-based parent firm, which divested 15% of its stake. This is the second South Korean company to tap the Indian stock market, following the listing of Hyundai Motors India Ltd in October last year.
A day before its IPO opened, LG had raised Rs 3,420 crore from anchor investors such as the government of Singapore, Abu Dhabi Investment Authority, and global asset managers including BlackRock.
“LG Electronics India's leadership in India’s home appliances and consumer electronics industry is driven by a combination of its strong brand equity, pioneering innovation, extensive distribution reach, robust manufacturing infrastructure, and long-standing supplier relationships all backed by the global strength and technological capabilities of LG Electronics Inc,” said the Anand Rathi research team.
It added, “On the valuation front, based on annualized FY26 earnings, the company is seeking a P/E of 37.6 times, and a post-issue market capitalization of approximately Rs 77,380 crore , making the issue appears to be reasonably priced. Looking at strong legacy brand recognition with market leadership across multiple consumer durables products along with in- house production capacity among the peers in India making it giant in industry. Hence, we assign “Subscribe” rating for the issue.”
