LG Electronics IPO has generated remarkable excitement in the market. Strong demand came not just from big institutional investors but also from non-institutional and retail investors alike. This response pushed the issue far beyond expectations, making it one of the most subscribed offerings in recent memory. Below is a refined and simple account of how the IPO unfolded, its strengths, its risks, and what lies ahead.
The IPO was arranged as an offer for sale (OFS), which means all the shares being offered belonged to existing shareholders (in this case, the Korean parent). The Indian entity itself received no fresh capital from this IPO. The total size of the offering amounted to ₹11,607 crore.
Shares were offered in a price band between ₹1,080 and ₹1,140 per share. At the upper end of this band, the implied valuation for the Indian unit was around ₹77,400 crore. The total number of shares on offer was 10.18 crore equity shares, constituting about 15 percent of the Indian company’s capitalization.
Because it was purely an offer for sale, the proceeds of the IPO will go to the promoter (the Korean parent), not to the Indian business itself.
Demand for the IPO exceeded expectations by a wide margin. Over the three-day subscription window, the issue attracted bids worth ₹4.39 lakh crore. In terms of subscription multiple, the issue was subscribed 54.02 times overall.
Breaking down by investor category, qualified institutional buyers (QIBs) led with a subscription of 166.51 times their reserved quota. Non-institutional investors (NIIs) subscribed 22.42 times, and retail individual investors (RIIs) subscribed 3.54 times. The employee reserved portion also saw a good uptake.
The IPO was fully subscribed within hours of opening. On the first day itself, the demand was so high that many quotas were filled quickly.
In the grey market, indications were that shares were trading at a premium over the IPO price. That suggested expectations of a strong listing gain when the shares hit the stock exchanges.
Several features of LG Electronics India made it an attractive IPO:
Strong financial performance: For the fiscal year 2024-25, the company reported revenue of ₹24,631 crore and a profit after tax of ₹2,203 crore. The margins and returns were healthy, with an EBITDA margin of 12.8 percent and net margins around 9 percent.
Debt-free balance sheet: The company faces minimal financial leverage, giving it more flexibility and lower risk in terms of interest obligations.
High returns: Return on equity (ROE) was estimated at about 37 percent, and return on capital employed (ROCE) around 43 percent. These figures indicate the business is generating strong returns on its investments.
Brand and scale: As a well-known brand in consumer electronics and home appliances, it enjoys strong market presence and distribution. These advantages make expansion and scaling more feasible.
Expectations of listing gain: The grey market premium and oversubscription levels led many to believe that listing would see a solid upside, drawing additional speculative and long-term interest.
These advantages combined to attract large anchor investors before the general subscription phase, giving confidence to other investors that the issue had solid backing.
No IPO is without risk, and LG Electronics India’s offering came under the spotlight for certain potential issues. These concerns especially relate to contingent liabilities, related-party transactions, and promoter control.
A proxy advisory firm, InGovern Research Services, flagged ₹4,717 crore in contingent liabilities. These liabilities arise from disputed tax, excise, and service tax claims, including items tied to transfer pricing and royalty agreements with the Korean parent. The advisory estimated that these obligations represent roughly 73 percent of the company’s net worth, making them significant in context.
Because these disputes are under litigation and no provisions have been made, an unfavorable outcome could erode future earnings or force major provisions, affecting profitability. The company’s royalty payments to the parent have ranged between 1.63 percent and 1.9 percent of revenue in recent years, but under current regulations the promoter can raise royalty payments up to 5 percent of domestic turnover without needing shareholder approval. Such a move could adversely affect margins of the Indian unit without direct recourse for minority investors.
Another issue is promoter control. Even after listing, the Korean parent will retain 85 percent ownership in the Indian unit. This concentrated ownership limits the influence that minority shareholders may have over major decisions, board composition, or related-party contracts. The potential for conflict of interest looms when decisions favor the promoter or its affiliates at the cost of minority shareholder interests.
These risks do not necessarily negate the opportunity, but they merit careful attention for anyone considering investing for the long term.
The allotment of shares is expected to be finalized on October 10, 2025. After allotment, refunds (to unsuccessful bidders) and credit of shares into demat accounts are likely by October 13. The listing date is expected to be October 14, 2025.
At listing, the performance on the first trading day will be closely watched. It will reveal whether investor optimism, as signalled in the grey market, translates into actual market gains or if other factors dominate.
It is worth watching how the company handles the disclosed tax disputes and related liabilities over time. How those legal and regulatory matters evolve could impact future valuation and investor confidence. Similarly, any decision to increase royalty charges or make new related-party agreements will be scrutinized, particularly if minority shareholders have limited ability to influence governance.
LG Electronics India’s IPO has made a splash in India’s capital markets. Massive oversubscription, broad participation across investor categories, strong financials, and brand appeal combined to drive record interest. The premium expectations and anchor support further amplify its status as a marquee listing for 2025.
At the same time, risks related to contingent liabilities, concentrated promoter control, and future royalty and intercompany dealings temper the enthusiasm. The way these issues are managed post-listing will help determine whether this IPO is seen as a lasting success or a cautionary tale.
As the allotment and listing unfold, the market will issue its verdict. A strong debut could validate much of the investor optimism. But over time, sustainable value will depend on financial discipline, governance integrity, and how effectively the company addresses the legal and regulatory overhangs.