LG Electronics India IPO Oversubscribed on Day 3: GMP, Valuation

LG Electronics India’s Rs 11,607-crore IPO continued to attract massive interest on its third day. By 3:30 PM, the offer was oversubscribed 34.89 times, with investors bidding for 248 crore shares against the 7.17 crore shares on offer. The response reflects strong demand across retail, institutional, and high-net-worth investors.

Positive Grey Market Sentiment

Investor enthusiasm is also visible in the grey market, where the premium on LG shares rose to 29.56% from 27% in the previous session. The rise indicates that investors are confident in the company’s fundamentals and see significant upside potential in listing gain.

Attractive Valuation Compared to Peers
LG Electronics India is entering the market at a valuation that is attractive relative to its competitors. At the upper price band of Rs 1,140, the IPO values the company at about 35 times projected FY25 earnings and roughly 25 times EV/EBITDA, implying a post-issue market capitalization of around Rs 77,400 crore. By comparison, peers like Havells, Blue Star, and Voltas trade at 63–68 times trailing earnings, while Whirlpool of India is in the 40-plus range.

Robust Financial Performance
Between FY23 and FY25, LG’s revenue grew at a compound annual rate of 10.8%, while EBITDA and net profit expanded 28% and 27.8%, respectively. In FY25, the company reported revenue of Rs 24,367 crore, EBITDA of Rs 3,110 crore, and net profit of Rs 2,203 crore. Operating and net margins stood at 12.8% and 9%, reflecting efficient cost management and superior profitability compared to peers.

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Superior Margins and Strong Balance Sheet
LG’s profitability metrics outshine its competitors. While Havells reported an EBITDA margin of 9.8%, Blue Star’s was 7.3%, Voltas 7.2%, and Whirlpool 7% in FY25, LG achieved 12.8%. The company is almost debt-free, with a return on capital employed (ROCE) of 42–50% and return on equity (ROE) near 37%, significantly higher than the industry average of 10–25%.

Brokerage Recommendations and Market Outlook
Brokerages view LG’s IPO as conservatively priced. Elara Securities described it as “highly attractively priced,” implying a potential 50% discount to peers despite stronger profitability and working-capital efficiency. Geojit and Choice Broking cited LG’s superior ROE, ROCE, and cash-flow profile for their ‘Subscribe’ recommendations. Analysts generally expect the listing to perform well, driven by strong fundamentals and investor confidence.

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Conclusion
With its market leadership, strong financials, high profitability, and attractive valuation, LG Electronics India’s IPO stands out as a compelling investment opportunity. Both retail and institutional investors are showing strong interest, making it one of the most eagerly awaited consumer durables IPOs in India this year.

Disclaimer: This article is for educational and informational purposes only and should not be considered investment advice. Investors should conduct their own research and read and understand all official company documents with the assistance a certified financial professional before making any investment decisions. Any opinions or reviews expressed in this article are for informational purposes only and do not constitute a recommendation to buy or sell securities.