Mumbai: LG Electronics India Ltd’s initial public offering (IPO) received a cautious response on the first day of bidding. By 11:21 AM on Tuesday, the IPO had been subscribed only 24 per cent. Investors had placed bids for about 1.74 crore shares out of the total 7.13 crore shares on offer. The three-day IPO will close on October 9.
Retail and Non-Institutional Interest Picks Up
The portion set aside for Retail Individual Investors (RIIs) saw a 28 per cent subscription, while non-institutional investors subscribed 49 per cent of their allocated quota. Qualified Institutional Buyers (QIBs), who have been allotted 50 per cent of the issue, are expected to show stronger interest in the remaining days.
Company Background and Offer Details
LG Electronics India is the Indian arm of South Korea's LG Group. It is one of the top players in India's home appliances and consumer electronics market. The company sells a wide range of products including refrigerators, washing machines, LED TVs, air conditioners, and microwaves. It also offers installation and repair services. The products are sold to both individual customers and businesses. The company has factories in Noida and Pune.
The IPO is worth Rs 11,607 crore and is entirely an offer-for-sale (OFS) of 10.18 crore shares, representing about 15 per cent of the company’s total equity. This means LG Electronics India will not get any money from the IPO. The proceeds will go to its South Korean parent company.
Anchor Investment and Pricing
On Monday, the company raised Rs 3,475 crore from anchor investors. The price band for the IPO is set between Rs 1,080 and Rs 1,140 per share. If priced at the upper limit, the company is valued at nearly Rs 77,400 crore.
Stock Market Debut Soon
This is the second South Korean company to come to the Indian stock market after Hyundai Motors India’s IPO in October last year. LG Electronics India is expected to list on the stock exchange on October 14.
