LG Electronics IPO: Why the ₹11,607 crore public issue received bids worth ₹4.4 lakh crore

The LG Electronics IPO is buzzing across investors' minds as it made a new record with the highest subscribed IPO in history. The issue received proceeds exceeding ₹4 lakh crore against the ask of ₹11,600 crore. The overall IPO was oversubscribed by 55x, with the QIB category subscribing 165x, followed by NIIs at 22.4 and the retail portion was subscribed by 3.55x. The overall subscription led to a record amount raised at ₹4,39,311 crore, excluding anchor investors' portion, which garnered ₹3,470 crore.

The other two big IPOs of Tata Capital and WeWork India received a moderate response, with overall subscription of 1.04x and 1.96x only. After the euphoric response to the LG Electronics IPO, investors are eagerly waiting for the allotment, which is scheduled to be finalised today.

Here are the key factors that led to the euphoric response to the LG Electronics IPO

Market leader in the home appliance industry

LG Electronics is a leader in electronics home appliance industry in India, offering a wide range of products. According to the RHP, the company has been the number one player in this industry for the six months ended June 30, 2025, 2024, 2023 and 2022, as per the market share (in terms of value) in the offline channel in India, as noted in the Redseer Report. The company is also the market leader in India across product categories like washing machines, refrigerators, panel televisions, inverter air conditioners and microwaves in terms of value in the offline channel, which nearly 80% of the home appliance and consumer electronics market.

Superior capital efficiency in the business

The company boasted strong operating margins as compared to its peers and superior return ratios, indicating effective and efficient use of capital. According to the RHP, the company’s return on capital for FY24 stood at 45%, which is above the industry average and also the highest in the industry. In addition, the free cash flow conversion ratio, which is defined as free cash flow divided by EBITDA, was 59.49% in FY24 compared to an average of approximately 55.6% of other industry players, according to the Redseer Report.

Industry-leading performance in Q1FY26

In the latest quarter ended June 2025, the company’s revenue remained largely unchanged at ₹6262 crore as against ₹6,408 crore in the June 2024 quarter. Whereas its listed players like Havells (-6%), Whirlpool (-2.5%), Voltas (-19.9%) witnessed a decline in the topline during the quarter. On the operational front, the company held the top position with the highest EBITDA margin in the industry at 11.4% as compared to 9.4% of Havells, 8.6% of Whirlpool and 3.8% of Voltas for the quarter ended June 2025.

Affordable valuations

The LG Electronics India IPO was launched at an affordable price-to-earnings ratio of 35x based on the latest FY25 earnings, which is much affordable compared to the listed peers, including Havells at 64x, Voltas at 52x, Whirlpool at 43x and Blue Star at 65x price-to-earnings. In addition, the company also commanded a higher return-on-net-worth of 37% as of FY25 as compared to the industry range of 9% to 19%.

To summarise, the LG Electronics IPO stood as a good opportunity for long-term investors to buy an industry leader at an affordable price. The IPO also stands as an example of the fact that quality at an affordable price will always receive huge demand from investors.