LG Electronics IPO: What the GMP signals mean for investors
LG Electronics’ initial public offering (IPO) continues to attract attention as the grey market premium (GMP) signals a potential double‑digit listing pop. Latest indications place GMP in the 30%–33% range, suggesting a likely listing price between Rs. 1,480 and Rs. 1,516, versus an issue price of Rs. 1,140. Even at the upper end of this band, valuations look compelling given the company’s earnings power and balance-sheet strength.
Valuation insights and implied upside
Assuming a listing price around Rs. 1,516, LG Electronics would trade near roughly 47x FY25 earnings, compared with about 35x at IPO pricing. While the multiple is higher, the justification rests on robust fundamentals. LG Electronics India posted a 46% jump in FY25 net profit to Rs. 2,203 crore on revenue of Rs. 24,367 crore, supported by a strong return on equity (ROE) of about 37% and a return on capital employed (ROCE) exceeding 40%. The company also carries a debt‑free balance sheet, which enhances financial flexibility relative to peers in the sector.
Sectorally, Indian electronic equipment peers typically trade in the 40–45x range, with leaders occasionally touching 60–70x. In this context, even after a 33% listing gain, LG Electronics could see re‑rating potential. Analysts think valuations might expand to 50–55x earnings over the next 12–18 months, implying an additional 15–20% upside from expected listing levels. These projections consider LG’s expanding operational footprint and improving margin profile.
Analyst view
Abhinav Tiwari, Research Analyst at Bonanza, notes the logic behind the premium: “LG Electronics has one of the strongest in‑house production capacities for home appliances and consumer electronics in India, supported by a solid after‑sales network.” He highlights the company’s scale, capacity (14.51 million products across Noida and Pune facilities as of mid‑2025), and service reach as key differentiators that could sustain multiple expansion in the months ahead.
Operational strengths fueling the thesis
LG Electronics India operates two modern manufacturing units and supports a vast service network across urban and rural India. As of June 2025, the network included 1,006 service centers, supported by 13,368 engineers and multiple call centers, with same‑day installation capabilities cited as a differentiator. This integrated model reduces downtime for customers and fosters loyalty, which can translate into stable revenue growth and improved pricing power over time.
Financial trajectory and growth drivers
FY25 was a standout year for LG Electronics India, with net profit rising 45.8% to Rs. 2,203.35 crore on revenue of Rs. 24,366.64 crore, as reported in the RoC filings. Revenue growth, coupled with efficient cost management and a high operating leverage, drove profitability higher. In 2024, the company posted FY24 revenue of Rs. 21,352 crore and post‑tax profit of Rs. 1,511.07 crore, underscoring a trajectory of steady growth.
Investors are also eyeing the broader potential: a larger, organized consumer electronics segment in India, expanding middle-class demand, and LG’s ongoing investments in capacity and service infrastructure could support sustained earnings growth. The balance sheet’s debt‑free status provides downside protection amidst macro uncertainties, making the stock’s risk‑reward more favorable for long‑term holders.
What to watch on listing day
The IPO is slated to list on both BSE and NSE, with allotments already finalized and refunds initiated as of the latest updates. The market will assess not only the price discovery but also the durability of LG’s earnings growth and the company’s ability to sustain high ROEs in a competitive landscape. For investors, the key question remains: does the stock’s expected valuation offer enough headroom for risk‑adjusted returns if the listing gap widens or contracts in the first few sessions?
Bottom line
With a robust FY25 performance, a debt‑free balance sheet, and an expansive service and production footprint, LG Electronics India presents a compelling case for consideration. The GMP signals point to a meaningful listing gain, and while valuations compress or expand in response to market sentiment, the company’s fundamentals and growth trajectory justify a premium versus traditional peers. As always, investors should weigh the potential upside against risks and align any participation with their risk tolerance and time horizon.
