LG Electronics India is now more valuable than its Korean parent as shares soar 50% in market debut

LG Electronics India eclipses Korean parent in m-cap as shares soar 50% in market debut; check this brokerage's price target

LG Electronics India surged 50.4% in its trading debut on October 14 and valued the company at $13.07 billion (Rs 1.15 lakh crore), eclipsing its South Korean parent's market capitalisation of nearly $10 billion (Rs 8,800 crore), as investors piled into the country's most bid-for IPO since 2008.

Shares of the Indian arm of LG Electronics rose to Rs 1,714.90 after it listed at Rs 1,710.1 on the National Stock Exchange of India. Its issue price was at Rs 1,140.

This is the best stock market debut for a billion-dollar IPO since Eternal in 2021.

Brokerage Prabhudas Lilladher started coverage on the stock with "buy" rating and gave a price target of Rs 1,780, which implies up to 4% upside from current market price.

Prabhudas Lilladher says company's extensive distribution network, premium brand positioning ensures market leadership across categories.

It sees FY25–28 revenue, EBITDA, profit to grow at 9.9%, 10.9%, and 9.3%, respectively, led by capacity additions, AMC and B2B expansion, local sourcing push.

"We initiate coverage on LG Electronics India with a BUY rating and a target price of Rs 1,800, premised on 40x FY28E EPS. LGEIL should trade at higher multiple, given the strong return ratios, higher OCF conversion and a strategic focus on localisation," said Motilal Oswal Financial Services.

"India's home appliances and consumer electronics market (excluding mobile phones) is estimated to post a CAGR of 14% over CY24-29. LG Electronics India, with its leadership across key roduct categories, is well-positioned to capitalize on this growth opportunity. The company plans to balance between premium and mass product as part of LG's global strategy and aims for premiumization of mass products which would

help to improve affordability," it added.

The company's $1.3 billion IPO was snapped up within hours of opening last week, drawing bids worth a staggering $50 billion, underscoring investor confidence in India’s consumer demand and manufacturing growth prospects.

The investor euphoria made it the most subscribed billion-dollar offering in nearly two decades, eclipsing interest seen in high-profile listings such as Life Insurance Corp of India’s $2.7 billion issue in 2022, and Paytm's $2.5 billion debut and Zomato's $1.3 billion flotation in 2021.

The company's valuation was higher than its target of $8.73 billion and sets it ahead of its India-listed peers, with Whirlpool valued at about $1.67 billion, Voltas at $5.16 billion, and Havells at $10.42 billion.

In comparison, Tata Capital, opened at Rs 330, a 1.2% premium to $1.75-billion IPO issue price, on October 14 and stayed muted through the day.

With inputs from Reuters