LG Electronics IPO GMP hints at double-digit returns. Should you subscribe? – News Air Insight

LG Electronics India’s initial public offering (IPO) is set to open for subscription tomorrow, October 7, with grey market activity signaling potential double-digit listing gains. The local arm of the South Korean conglomerate has fixed its price band at Rs 1,080-1,140 per share for the Rs 11,607-crore IPO, and the latest grey market premium (GMP) implies a 22% gain from the upper end of the price band.

The IPO, entirely an offer-for-sale (OFS), will remain open for public subscription from October 7 to 9. Retail investors can apply in lots of 13 shares, requiring a minimum investment of Rs 14,820 at the upper price. Allotment will be finalised on October 10, and the stock is expected to list on both the BSE and NSE on October 14.

Grey market buzz

Market intermediaries suggest strong investor appetite, with the last reported GMP at Rs 251 as on October 6, implying a possible listing price of Rs 1,391, a 22% gain from the upper end of the price band.

Analysts’ take

Brokerages are upbeat about LG India’s debut. SBI Securities has given a “Subscribe” rating, noting the company’s “strong growth visibility, innovation pipeline, and deep distribution network.”

At Rs 1,140 per share, LG trades at a P/E of 35.1x FY25 earnings — “fair compared to peers,” analysts say, given its dominant market positions: washing machines (33.5%), refrigerators (29.9%), air conditioners (20.6%), and microwaves (51.4%).Choice Broking has also given a “Subscribe” rating and highlighted the company’s competitive edge and said, “LG Electronics India… is the number one offline market player in major home appliances & consumer electronics (excluding mobile phones) in India.”India’s home appliances and consumer electronics sector is projected to reach about Rs 10,965 billion by 2029, supported by urbanisation, rising incomes, and premiumisation. LG India also aims to expand its B2B business in HVAC, LED solutions, and electronic blackboards, tapping into high-growth segments.

However, analysts caution about promoter dependence, raw material volatility, foreign exchange fluctuations, and seasonal sales risks.

With a robust grey market premium, strong category leadership, and growth prospects in both B2C and B2B segments, LG Electronics India’s IPO is shaping up as one of the marquee listings of 2025.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)