LG Electronics IPO Day 3 Highlights: Issue booked 54x — GMP jumps to a high of ₹328. Should you bid?

LG Electronics IPO was subscribed 54.02 times so far on the third day of bidding. The IPO received bids for 3,85,32,39,416 shares as against 7,13,34,320 shares on offer. Here's how different segments were booked:

QIB: 166.51x

NII: 22.44x

Retail: 3.54x

Employee: 7.62x

As of June 30, 2025, the company services consumers through a dedicated team of 286 employees and 463 B2B trade partners for the three months ended June 30, 2025. This network enables the company to effectively address the demands of B2B consumers. Its extensive pan-India presence allows the company to offer services to a wide consumer base, helping maintain its market share. The company’s distribution strategy is based on building strong relationships with trade partners who purchase its products and sell them to end consumers.

As of June 30, 2025, LG Electronics India operates the largest distribution network among leading home appliances and consumer electronics players in India, according to the Redseer Report. The company’s distribution network spans both urban and rural areas, with 35,640 B2C touchpoints for the three months ended June 30, 2025.

LG Electronics India also serviced consumers through a dedicated network of 463 B2B trade partners as of June 30, 2025, and had a team of 286 employees engaged in customer service during the same period.

LG Electronics India has delivered robust financial performance, with net profit surging 45% year-on-year and revenues exceeding INR 240 billion in FY2025. The company’s capital-efficient business model, high capacity utilization, and strong service and maintenance ecosystem underpin its ability to scale efficiently, maintain industry-leading margins, and generate stable cash flows even amidst competitive intensity.

LG Electronics India’s IPO comes amid heightened momentum in the Indian consumer durables sector and robust domestic consumption trends. The company’s dominant market position across key product verticals—supported by widespread distribution, growing local manufacturing, and a capital-efficient, debt-free balance sheet—provides strong levers for growth and margin resilience. The IPO, valued at approximately INR 773 Bn, is attractively priced versus domestic peers and backed by industry-leading return ratios and expanding profitability metrics.

However, key factors to monitor include execution risks related to the new Andhra Pradesh plant, intensity of competition, and raw material cost fluctuations, though LG’s brand equity and operational track record mitigate many of these sectoral headwinds.

At the upper band of INR 1,140, the issue is valued at P/E of 37.69x and EPS of INR 30.25. We are recommending a “Subscribe For Long Term” rating for this issue.

LG Electronics IPO GMP today stood at ₹328 apiece. With this, it surpassed its previous high of ₹318 witnessed a day ahead of the opening day. The current GMP signals that the LG Electronics IPO listing price could be ₹1468, a premium of 28.7%.

LG Electronics IPO was subscribed 12.74 times so far on the third day of bidding. The IPO received bids for 30,05,73,143 shares as against 7,13,34,320 shares on offer. Here's how different segments were booked:

QIB: 26.13x

NII: 17.99x

Retail: 2.88x

Employee: 6.10x

The royalty payments made by the company to its Promoter under the License Agreement or otherwise may attract regulatory scrutiny or action. As of the date of this Red Herring Prospectus, the company has a contingent liability of ₹3,153.00 million in respect of royalty payments to its Promoter. There is no assurance that similar observations will not be raised by South Korean tax authorities in future periods, which could adversely impact the company’s results of operations.

Here are some risks that LG Electronics faces that investors must know:

• Increase in raw material prices could adversely affect operations and profitability.
• Significant dependence on revenue from the Home Appliances and Air Solution division.
• Market share across select product categories has decreased.
• Changes in royalty terms and dependence on the parent entity for technical know-how may impact the business.

The IPO is entirely an Offer for Sale (OFS) amounting to ₹11,607 crore. At the upper price band, the issue is valued at 35.1x P/E.

The company is a market leader with a strong market share across product categories. Leveraging its technological innovations and decades of operations, the company has developed a deep understanding of consumer behaviour and the ability to adapt to changing preferences. This, combined with strong brand loyalty and perceived value, are key factors that support its valuation.

Compared to peers, we find the issue to be fairly valued, and therefore, we recommend a “SUBSCRIBE” rating for the issue.

The following table provides our revenue breakdown by segment for the periods indicated:

LG Electronics India Limited manufactures and sells major home appliances and consumer electronics products in India. The company caters to both B2C and B2B customers within India and in international markets.

It operates through two primary business segments:

Home Appliances and Air Solution Division – This includes the sale of products such as refrigerators, washing machines, air conditioners, water purifiers, dishwashers, microwave ovens, air purifiers, compressors, and more.

Home Entertainment Division – This segment covers the sale of products such as televisions, monitors, interactive displays, and information systems.

In addition to product sales, the company also provides installation services, as well as repair and maintenance services for all its offerings.

We believe that LG Electronics India Limited, a global leader in consumer electronics and home appliances, offers a highly compelling investment proposition in India’s high-growth consumer market. The company is strategically positioned as the undisputed market leader, ready to capitalize on rising middle-class incomes, urbanization, and low product penetration.

LG Electronics India Limited exhibits market dominance and exceptional financial efficiency, driven by: Industry Leadership: Holds the No. 1 market share across key appliance categories. Robust Financials: Sustained, healthy revenue growth (e.g., ₹21,352 Cr in FY24) and high profitability with a nil-debt capital structure.

The company’s strategic focus is on accelerating high-margin growth by emphasizing premium products, the B2B segment (e.g., HVAC), and new recurring revenue streams — all supported by its vast, localized manufacturing and distribution ecosystem.

We recommend that investors seeking exposure to a market-dominant, financially sound company poised for sustainable, long-term growth in the Indian consumption story consider SUBSCRIBING to the issue from a medium-to-long-term perspective.

LG Electronics IPO was subscribed 4.21 times so far on the third day of bidding. The IPO received bids for 30,05,73,143 shares as against 7,13,34,320 shares on offer. Here's how different segments were booked:

QIB: 2.61x

NII: 10.97x

Retail: 2.23x

Employee: 4.79x

LG Electronics India demonstrates a strong financial profile with FY25 ROE of 37% and ROCE of 43%, supported by its dominant position in consumer durables, robust 13% EBITDA margins, and consistent profit expansion. Its extensive manufacturing base and nationwide distribution network enhance scalability and growth visibility. The IPO appears attractively priced at a trailing PE of ~35x, reasonable against peers, with proceeds directed toward capacity expansion and market growth.

— Views by Abhinav Tiwari, Research Analyst at Bonanza

LG Electronics IPO opened for last and final day of susbcription. Investors can apply for the IPO as of 5 pm today.

LG Electronics' ₹11607 crore IPO is entirely an offer for sale, meaning no proceeds from the share sale will go to the company. All the funds raised will be received by the selling shareholders.

LG Electronics India Ltd’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.

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 ₹7,73,801 million, making the issue appear 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 peers in India, makes it a giant in the industry.

Hence, we assign a “Subscribe” rating for the issue.

The grey market premium for LG Electronics witnessed a further uptick. As of today, LG Electronics IPO GMP is ₹300. At the prevailing levels, LG Electronics' IPO listing could occur at ₹1440, a premium of 26.32% over the upper end of the price band.

On Wednesday, LG Electronics IPO GMP was ₹298. However, it was tad lower than ₹318 witnessed on the first day of bidding.

LG Electronics India IPO received 3.32 times subscription on the second day of bidding on Wednesday. The IPO got bids for 23,70,85,836 shares against 7,13,34,320 shares on offer, according to NSE data.

The quota for non-institutional investors received 7.60 times subscription. The category for Qualified Institutional Buyers (QIBs) got subscribed 2.59 times, while the portion meant for Retail Individual Investors (RIIs) attracted 1.90 times subscription.