LG Electronics India leaps 48% on debut, exceeds Korean parent in mcap

LG Electronics India's record-breaking debut sees shares soar 48%, valuing the company above its South Korean parent and making it India's most-valued consumer durables brand

LG Electronics India made a dazzling market debut on Tuesday, ending 48 per cent higher than its issue price and surpassing its South Korean parent in market value.

 

Shares of the consumer appliance giant closed at ₹1,683 apiece, up ₹543 from the issue price of ₹1,140, giving the company a market capitalisation of ₹1.14 trillion ($13 billion), compared with parent LG Electronics Inc’s valuation of $9.4 billion.

 

The listing marks the best first-day performance for a company launching a domestic initial public offering (IPO) of more than ₹10,000 crore. LG India’s stock hit a high of ₹1,749 and a low of ₹1,650 on the National Stock Exchange (NSE), where shares worth nearly ₹12,000 crore changed hands.

 

 

LG Electronics India also became the country’s most valued consumer durables player, overtaking Dixon Technologies, which commands a market cap of about ₹1 trillion.

 

The blockbuster debut followed record-breaking investor demand for LG’s ₹11,607 crore IPO — the eighth-largest in India — which attracted bids worth ₹4.4 trillion across 6.5 million applications. The issue, structured entirely as an offer for sale, saw LG divesting a 15 per cent stake.   

 

The strong debut, according to analysts, reflected pentup demand from investors who missed out on the IPO, attractive relative valuations, and expectations of sustained consumption growth. Nearly half a dozen brokerages initiated coverage on the stock, setting target prices between ₹1,700 and ₹1,820.

 

India’s home appliances and consumer electronics market is projected to expand at an annual pace of 11 per cent between 2024 and 2029 to reach ₹11 trillion. LG holds one of the largest market shares across major categories, including televisions, washing machines, refrigerators, air conditioners and ovens.

 

In a note on Smartkarma, Devi Subhakesan of Investory said LG’s strong brand equity, sound financials, and leadership across categories drove immense investor enthusiasm. She highlighted LG’s “significantly superior” return on capital (RoC) of 45 per cent in FY25, compared with low double-digit RoC among listed peers.

 

Motilal Oswal set a target price of ₹1,800, valuing the company at 40 times its estimated FY28 earnings of ₹3,006 crore. The brokerage cited tailwinds, including strong RoC, robust cash generation, localisation initiatives, improving gross margins, and growth in high-margin business-to-business and annual maintenance service (AMC) businesses.

 

LG is investing $600 million to build its third manufacturing facility in India at Sri City, Andhra Pradesh. The plant, designed to serve both domestic and export markets, will be developed over four to five years, with the first phase expected to go live before December.

 

At the current valuation, LG trades at 50 times and 43 times its estimated earnings for FY26 and FY27, respectively — a factor some analysts believe could limit further short-term upsides.