LG Electronics IPO Day 2 Updates: Issue subscribed 3.32x so far. GMP hints 26% listing pop. Check key details

LG Electronics IPO subscription status was 3.32x on day 2. The retail portion was subscribed 1.90 times, and NII portion has been booked 7.60x, Qualified Institutional Buyers (QIBs) portion received 2.59 times bids. The employee portion booked 4.11 times.

The company has received bids for 23,70,85,836 shares against 7,13,34,320 shares on offer, at 17:00 IST, according to data on BSE.

FY25 margins stood at 12.8% vs 11.4% in Q1FY26, impacted by a weak summer and geopolitical factors. Management remains confident of sustaining fullyear double-digit margin levels and expanding further.

Operates two plants in India, with a third plant coming up in South India (Sri City) under a phased expansion plan. This will help cater to the fast-growing South market and also bring down logistics costs. USD 600 mn (from internal accruals) earmarked for the new plant (focus: ACs, compressors, etc.). Production is expected to begin by Nov 2026 (first phase).

Premium products contributed >25% of sales in FY25, well above the industry average of ~17%. LGEIL is expanding market share in premium categories while also retaining leadership in the value segment. Margin expansion is increasingly being supported by higher premium product contribution.

The company is backed by one of the largest in-house production capacities (excl mobiles) amongst home appliance players in India. It has two advanced manufacturing units located in Noida and Pune. As of Jun’25, the combined installed manufacturing capacity stood at 14.5mn products, with aggregate capacity utilization rate of 77% as of FY25, an increase from 70% in FY23.

The company has an expansive sales network through 35,640 B2C touch points comprising LG Brand Shops that are strategically located in main shopping areas of the cities and towns, modern trade stores such as Reliance Retail, Croma (Infiniti Retail), and Vijay Sales, online touch points, traditional stores, distributors, and sub-dealers.

“The IPO is offered at a reasonable valuation of P/E of 35x FY25 EPS (vs peers who are trading at a much higher multiples, refer exhibit 1). We believe IPO is priced reasonably, considering company’s leadership position, strong brand image, global parent support, largest distribution network and manufacturing strength. We assign ‘SUBSCRIBE’ rating to the IPO,” said Centrum Institutional Research.

1. The company is significantly dependent on LG Electronics, its promoter, for various aspects of its operations and pays royalties under the existing License Agreement. Any adverse changes in relationship with LG Electronics or other companies within the LG Group could materially impact the company’s business operations, reputation, financial condition, and overall results.
2. The royalty payments made to the promoter under the License Agreement may attract regulatory scrutiny or action. As of the date of this Red Herring Prospectus, the company has a contingent liability of Rs. 3,153.00 million relating to these royalty payments. There is no assurance that similar observations will not be raised by tax authorities in future periods, and any such actions could adversely affect the company’s financial condition and results of operations.

1. Market leader in India’s home appliances and consumer electronics sector across key product categories
2. Driving operational excellence through robust manufacturing and localised supply chain

“The IPO,valued at approximately ₹773 Bn, is attractively priced versus domestic peers andbacked 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 ₹1,140, the issue is valued at P/E of 37.69x AND EPS of ₹30.25.We are recommending a “Subscribe For Long Term” rating for this issue,” said Arihant Capital Markets.

1. Market Leadership Across Product Categories
2. Expansion of Manufacturing Footprint and Integrated Operations
3. Strong Financial Profile and Consistent Profitability

Access to innovative technology, brand power (LG is among the top 100 brand globally) and global standard of excellence.

LG Electronics India is a healthy financial franchise with revenue/PAT CAGR of 13%/22% over FY22-25. Average EBITDA margin at 10.7% (up 270 bps from 10.1% in FY22 to 12.8% in FY25) is higher than peers, who operate at single digit EBITDA margin. The company is debt free and operates with low working capital requirement . Cash flow conversion is healthy with aggregate OCF/EBITDA of 65% and FCF/sales of 5.4% over FY22-25.

1. Dependence on parent company (LG Electronics Inc): It has major dependence on parent company for its brand, product technology, design and R&D support. Any export expansion requires approval from parent, thus, limits strategic autonomy.
2. Competitive and price sensitive industry: The company operates in a highly competitive and price-sensitive market, facing margin pressure from both global and domestic brands.
3. Pending Tax and Legal Disputes: Ongoing tax and transfer pricing disputes pose financial uncertainties that could impact future profitability.

LG Electronics operates the largest distribution network among leading home appliance and consumer electronics players in India. The company’s extensive reach spans 35,640 B2C touchpoints, including LG BrandShops, modern trade partners such as Reliance Retail, Croma, and Vijay Sales, as well as online platforms and traditional retail outlets.

LG Electronics has two manufacturing units located at Noida and Pune with a total capacity to manufacture 14,510,000 products and operating at aggregate capacity utilization rate of ~77% for FY25.

“With favourable macroeconomic trends, rising consumer demand, and continued product innovation, the company is well-positioned for sustainable long-term growth. At a valuation of 35.1x FY25 EPS, compared to the industry average of 55.7x, the issue appears attractively priced. Thus, we recommend a ‘SUBSCRIBE’ rating on the IPO,” said Nirmal Bang.

1. Leading brand in India’s offline consumer electronics and appliances market, backed by strong brand equity and global technological expertise of LG Electronics Inc., Korea
2. Strategic Investments and Growth Outlook
3. Localized supply chain and automation-led manufacturing
4. Extensive distribution and after-sales service network
5. Market leader in multiple product categories with first-mover technological launches in India

The company’s activities are organized into 2 business segments – (i) Home Appliances and Air Solution; and (ii) Home Entertainment.

1. Build a strong foundation to capture long-term growth in India.
2. Continue to be a brand of choice for every Indian household across volume and premium market categories.
3. Diversify business models to create new consumer value

1. Leading market share in the home appliances and consumer electronics industry in India with #1 market share across key product categories.
2. Introducing innovative technologies tailored to the needs of the Indian consumers.
3. Shaping consumer experience with pan-India distribution and after-sales service network.
4. Operational efficiency through strong manufacturing capabilities and localized supply chain.
5. Capital-efficient business with high growth and profitability.

“LG Electronics IPO is offered at a reasonable valuation of P/E of 35x FY25 EPS We believe IPO is priced reasonably, considering company’s leadership position, strong brand image, global parent support, largest distribution network and manufacturing strength. We assign ‘SUBSCRIBE’ rating to the IPO,” said, Centrum Broking.

The company is a subsidiary of LG Electronics Inc, which is a leading single-brand global home appliance player. It leverages reputation and brand recall of the ‘LG’ brand to maintain its market leadership in India. Further as part of LG ecosystem, the company uses product innovation to design and introduce new products in the country.

LG Electronics India Ltd has successfully raised ₹3,475 crore from anchor investors just a day before its initial public offering (IPO) opened for public subscription. The anchor book generated substantial interest, particularly from foreign investors, with notable participation from the Singapore government, Goldman Sachs, Fidelity Funds, BlackRock Global Funds, Abu Dhabi Investment Authority, and Government Pension Fund Global, as highlighted in a circular posted on the BSE's website.

Domestic institutional investors also joined the anchor round, with participation from prestigious entities such as SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mutual Fund, SBI Life Insurance Company, HDFC Life Insurance Company, and ICICI Prudential Life Insurance Company.

In total, LG Electronics India allocated 30,481,539 equity shares to 149 funds at a price of ₹1,140 each, marking a strong start for the company as it prepares for its IPO.

LG Electronics IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

Tentatively, LG Electronics IPO basis of allotment of shares will be finalised on Friday, October 10 and the company will initiate refunds on Monday, October 13, while the shares will be credited to the demat account of allottees on the same day following refund. LG Electronics share price is likely to be listed on BSE and NSE on Tuesday, October 14.

LG IPO GMP or LG Electronics IPO GMP today is ₹298. This indicates LG Electronics share price were trading at a premium of ₹298 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of LG Electronics share price was indicated at ₹1,438 apiece, which is 26.14% higher than the IPO price of ₹1,140.

Based on the grey market activities over the last eight sessions, the IPO's Grey Market Premium (GMP) is showing an upward trend today, indicating expectations for a strong listing. The GMP has fluctuated, with the lowest recorded at ₹145.00 and the highest reaching ₹318. Experts are optimistic about the potential for a positive debut in the market. This momentum suggests heightened investor interest and confidence in the IPO.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.