LG, WeWork set the tone for busy IPO week; Tata Capital's subscribed 75%

The initial public offering (IPO) of LG Electronics India got off to a strong start on Tuesday, with its share sale fully subscribed on day one, while WeWork India’s IPO sailed through on the final day of subscription.

 

Meanwhile, Tata Capital’s mega share sale was three-fourths covered, reflecting mixed signals from the primary market as investors selectively picked their targets.

 

LG Electronics’ day-one subscription is the highest among the six ₹10,000 crore-plus IPOs since 2020. The week is shaping up to be crucial for the primary market, with half a dozen IPOs expected to mobilise over ₹30,000 crore.

 

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The ₹3,000 crore IPO of co-working office space provider WeWork attracted just 1.2 times subscription amid concerns over its governance structure. The institutional portion was subscribed 1.8 times, while the high-net-worth individual (HNI) and retail portions remained undersubscribed at 23 per cent and 61 per cent, respectively.

 

Investor sentiment was affected by criminal cases against the promoters and concerns about the company’s profitability. Proxy advisory firm InGovern noted that WeWork’s FY25 profit after tax (PAT) of ₹128 crore is entirely tax-adjusted and does not reflect recurring earnings.  

 

Meanwhile, Tata Capital’s issue was 75 per cent subscribed a day before its close. The company has priced its ₹15,512-crore IPO between ₹310 and ₹326 per share. At the upper end, Tata Capital is valued at ₹1.38 trillion. The IPO is the fourth largest in the domestic market and the largest-ever from a non-banking finance company (NBFC).

 

The offering comprises a fresh issue of shares worth ₹6,846 crore to augment the NBFC’s capital base. Additionally, promoter Tata Sons and the International Finance Corporation (IFC) are offloading shares worth ₹8,666 crore. Following the IPO, promoter holding will decline from 95.6 per cent to 85.5 per cent.

 

The IPO of LG Electronics, which opened on Tuesday, was fully subscribed. The institutional investor portion was almost 50 per cent subscribed, the wealthy investor portion 2.3 times, and the retail portion 80 per cent.

 

Analysts attributed the strong response to LG’s attractive valuations relative to peers.

 

On Monday, the appliance major raised ₹3,420 crore from anchor investors. The IPO, entirely an offer-for-sale by the South Korea-based parent, will see LG divest 15 per cent of its stake. This marks the first time LG has opted to list anywhere outside its home market.