LG Electronics India Limited’s initial public offer sparked frenzied activity, quickly rising to a market capitalization of $13 billion—surpassing its parent, LG Electronics of South Korea, valued at $9.4 billion.
It was the eighth-largest IPO in India. LGEINDIA got listed on both the National Stock Exchange and the Bombay Stock Exchange on October 14.
LGEINDIA achieved a remarkable return of 50.4% on its first day of listing, setting a new benchmark among billion-plus dollar IPOs.
LGEINDIA has now become India’s most valued consumer durables firm, surpassing Dixon Technologies, which has a market capitalization of $11.15 billion, and eclipsing its competitors, Whirlpool of India ($1.7 billion), Voltas ($5.8 billion), and Havells India ($10.4 billion).
In a strategic move, the parent Korean company made an offer for sale instead of a new share offer, by divesting 15% of its stake to raise $1.3 billion. In an OFS, only existing shares are sold, and no new shares are created; so dilution of ownership does not happen, and the proceeds are eligible for repatriation. It is simpler and faster compared to the regulations for the new share offer.
Previously, Maruti Suzuki, with a value of $57.5 billion, had eclipsed its parent, Suzuki Motor Corp’s market capitalization of $28.3 billion in September this year. Indian equity markets are experiencing unprecedented events this year.
The IPO saw strong demand, with 54 times overall, and 166 times qualified institutional segment over-subscription.
LGEINDIA also sold $392 million in shares to 149 anchor investors. Foreign investors include Goldman Sachs Funds, BlackRock Global, the Government of Singapore, the Monetary Authority of Singapore, the Global pension fund of Norway, Abu Dhabi Investment Authority, and Lion Global Investment funds.
Domestic investors include SBI Mutual Fund, ICICI Prudential Asset Management, and Nippon Life India Asset Management. Investors have high confidence due to its fair valuations, leadership position in the market, operational efficiency, innovations, sustainability, and promising earnings prospects.
Morgan Stanley India Company Private Limited, J.P. Morgan India Private Limited, Axis Capital Limited, BofA Securities India Limited, and Citigroup Global Markets India Private Limited managed the LGEINDIA share sale.
