LG Electronics India’s $1.3 billion IPO was fully subscribed on the first day of bidding on Tuesday, underscoring investor optimism about the country’s second-largest appliance maker in an under-penetrated market during a busy IPO season.
The delayed listing of the local arm of South Korea’s LG Electronics comes after India overhauled its complex goods and services tax regime, slashing duties on a slew of big-ticket items and potentially boosting demand for large appliances.
The IPO, which values the company at $8.7 billion at the upper end of the range, comes at a time when Indian listings are picking up pace, with firms set to raise up to $8 billion.
The share sale was subscribed 1.04 times, with demand led by so-called non-institutional investors, who bid for 2.3 times the shares reserved for them, exchange data showed.
Retail buyers, for whom the largest portion was reserved, subscribed 81% of the shares set aside for them while institutional investors bought 49% as of 4:51 p.m. IST.
The IPO will close on Thursday, and the stock is expected to start trading on October 14.
LG Electronics India has previously said it plans to grow in the “highly under-penetrated” Indian market by expanding its offerings and widening its retail presence in smaller towns.
Refrigerators, the company’s top revenue contributor, account for just 35% of all appliance sales in India, per a company presentation, trailing markets such as the US and China, where appliance penetration has hit 100%.
LG competes with Whirlpool, and Samsung in the domestic market, which is expected to grow 12% annually till 2029, according to consultancy firm RedSeer. The market was worth $38.2 billion as of 2024.
The appliance maker raised nearly $392 million from so-called anchor investors, including BlackRock and the wealth funds of Singapore and Norway.
Reuters
