India’s LG Electronics rose 53.4% on its trading debut, surpassing its South Korean parent’s market value on Tuesday, as investors took a big risk on its manufacturing and retail plan, which is driven by an increase in consumer demand.
India’s recent tax cut on consumer goods, such as refrigerators and televisions, with the central bank’s supportive approach, is expected to boost short-term growth for appliance manufacturers.
The listing of LG India, the most significant billion-dollar Initial Public Offer (IPO) in India since 2021, coincides with the country’s festive season, a time when consumer spending reaches its peak. Additionally, this event takes place within a busy primary market, where favourable policies are pushing an increase in fundraising to surpass last year’s record $20.5 billion.Â
Consumption is “where LG has gotten a better response compared to other IPOs that are currently in the market”, said Deven Choksey, managing director at DRChoksey FinServ.
The highest $1.3 billion offering started accepting bids nearly the same time as the year’s biggest IPO, which included Tata Capital and WeWork India’s listing, a major office working space.
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However, LG’s IPO was completely subscribed within hours of its launch, attracting bids totalling around $50 billion. Both Tata Capital and WeWork saw lower returns across investor segments.
