LG IPO set for strong listing. Can there still be upside if debut is around 30–35% premium?

After a record-breaking demand, LG Electronics India is set to make a market debut on Tuesday. The stock is expected to list at a premium of around 30–33%, translating to a price range of Rs 1,480–1,516 against the issue price of Rs 1,140 per share, according to the GMP trends and analyst projections. But even with such a strong start, the journey may be far from over.

The grey market premium (GMP) for the issue has held steady at around 30% for much of the week, signalling healthy investor appetite. The Rs 4,380-crore issue drew bids worth Rs 4.39 lakh crore, eclipsing Bajaj Housing Finance’s previous record. The overall subscription stood at 54.02 times, led by qualified institutional buyers who bid for 166.5 times their quota.

This has been the listing everyone is looking forward to as LG’s financials appear to justify the hype. The company’s FY25 net profit rose 46% to Rs 2,203 crore, driven by steady demand across its appliance and consumer electronics segments. Revenue came in at Rs 24,367 crore, while return ratios stayed enviably high, with ROE at 37% and ROCE above 40%.

LG India also boasts a debt-free balance sheet, an increasingly rare advantage in its sector.

So what happens if the stock opens 30–35% higher? According to analysts at Bonanza, there’s still more room for upside. At a potential listing price of around Rs 1,500, LG would trade at 47 times its FY25 earnings, up from about 35 times at the IPO price.

Yet, this remains in line with or below the valuations of many sector peers. Companies in the electrical and home appliance space — such as Havells, Dixon Technologies and Voltas — trade anywhere between 40x and 70x earnings, leaving scope for further re-rating.Abhinav Tiwari, research analyst at Bonanza, said the valuations look “reasonable even after the premium listing,” pointing to LG’s scale, brand dominance and growth visibility. “Over the next 12–18 months, the stock could trade closer to 50–55 times earnings, implying another 15–20% upside from listing levels,” he noted.Mehta Equities expects a “healthy listing gain of 25–30% or more”, backed by strong investor sentiment and a fundamentally sound business model.

The firm recommends that allotted investors hold for the long term, citing LG’s leadership in India’s fast-growing, value-driven home appliances market. Non-allotted investors, it advises, should wait and watch, considering fresh entry on post-listing corrections.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)