LG Electronics India is set to make its Dalal Street debut on Tuesday, October 14 and Dalal Street is gearing up for fireworks on this mega listing, if one goes by the latest signals based on its soaring grey market premium (GMP).
After a historic response to its IPO, the GMP for LG Electronics India has scaled to new highs.
Last heard, LG Electronics India was commanding a grey market premium of Rs 420-425 apeice, suggesting nearly 37 per cent listing gains for the investors. Its GMP has increased by Rs 50 in the last 24 hours as GMP stood around Rs 370 apeice a day ago. The sentiments for LG Electronics IPOs remain unaffected by muted listing of Tata Capital and others.
Prashanth Tapse, Senior VP Research at Mehta Equities anticipates a strong listing of LG Electronics, supported by robust investor sentiment and a fundamentally sound business model. The valuation was attractively priced relative to the industry average of comparable listed peers, justifying the premium listing, he said.
“Despite the expected listing pop, LG Electronics India remains a compelling long-term structural story, serving as a proxy for India’s fast-growing, value-driven home appliances market. Investors should ‘hold’ this stock the long term, backed by LG’s dominant market position, diversified product mix, and consistent growth outlook, while noting possible short-term volatility,” Tapse added.
The IPO of LG Electronics India ran bidding between October 07-09. It had offered its shares in the price band of Rs 1,080-1,140 per share with a lot size of 13 shares. The company raised a total of Rs 11,607 crore via IPO, which was entirely an offer-for-sale (OFS) of up to 10,18,15,859 equity shares by its South Korean promoter LG Electronics Inc.
The issue was overall subscribed a solid 54.02 times fetching over 65.06 lakh applications, fetching bids for nearly Rs 4.4 lakh crore. The allocation for the qualified institutional bidders (QIBs) was subscribed a whopping 166.51 times, while the portion for non-institutional investors’ (NIIs) was subscribed 22.45 times. However, the retail investors’ quota was booked 3.55 times.
Gaurav Sharma, Head of Equity, Commodity & Currency Research Globe Capital Market said that large IPOs often fail to impress on debut but investors should buy pedigree and long-term business in such stocks.
Ahead of its IPO, LG Electronics raised a total of Rs 3,474 crore from anchor investors as it allocated 3.04 crore equity shares at Rs 1,140 apiece. Its anchor book included names like Abu Dhabi Investment Authority, INQ holdings, Government of Singapore, Government Pension Fund Global, Goldman Sachs, Blackrock Global Funds, Fidelity Investment, HSBC and others.
Brokerage firms were positive on the issue, suggesting to subscribe to it. Morgan Stanley India, JP Morgan, Axis Capital, BofA Securities and Citigroup Global Markets were the book running lead managers for LG Electronics IPO, while Kfin Technologies was the registrar of the issue. Its shares shall be listed on both BSE and NSE.