Mega IPO Face-Off: Tata Capital vs. LG Electronics – A Battle for Investor Capital

The Indian primary market is witnessing an unprecedented clash of corporate titans as two mega Initial Public Offerings (IPOs)—Tata Capital Limited and LG Electronics India Limited—have opened for subscription in quick succession. These twin billion-dollar issues, collectively aiming to raise over ₹27,000 crore, represent a major stress test for market liquidity and investor appetite amidst a fluctuating broader market.

While both IPOs have garnered significant attention, they represent vastly different investment propositions: one, a diversified financial behemoth backed by the century-old Tata Group, and the other, a consumer electronics giant with a dominant market share in India’s fast-growing durables sector.

The Financial Powerhouse: Tata Capital IPO

Tata Capital, the flagship Non-Banking Financial Company (NBFC) of the Tata Group, has launched one of the largest IPOs of the year, with a total issue size of ₹15,512 crore.

Key Details and Objective: The issue is a mix of a Fresh Issue of shares worth ₹6,846 crore and an Offer for Sale (OFS) of ₹8,666 crore by existing shareholders, primarily the promoter, Tata Sons. Crucially, the fresh issue proceeds will flow directly into the company, earmarked to augment its Tier-I capital base. This capital infusion is vital for an NBFC, enabling it to meet regulatory requirements and fund the future growth of its lending portfolio across retail, SME, and corporate segments.

Business and Fundamentals: Tata Capital is positioned as the third-largest diversified NBFC in India, boasting a strong pan-India presence and total assets exceeding ₹2.5 lakh crore. The company’s financials show robust growth, with its loan book expanding at a significant Compound Annual Growth Rate (CAGR). Its asset quality, reflected in a low Gross Non-Performing Asset (GNPA) ratio, is considered one of the best in the sector. The implicit trust associated with the ‘Tata’ brand is a significant intangible asset, providing a low-cost advantage in raising funds.

Valuation and Market Perception: Analysts generally view the IPO pricing as reasonable, offering an attractive opportunity for long-term investors. The valuation is set at levels that compare favourably with industry leaders like Bajaj Finance, leaving a potential upside as the company continues to scale and benefit from its digital-first lending strategy.

The Consumer Durable Giant: LG Electronics India IPO

Hot on the heels of the Tata Capital launch, LG Electronics India, a wholly-owned subsidiary of South Korea’s LG Electronics Inc., is rolling out its blockbuster IPO with a total issue size of ₹11,607 crore.

Key Details and Objective: In sharp contrast to the Tata Capital offering, the LG Electronics IPO is a Pure Offer for Sale (OFS). This means the promoter, LG Electronics Inc., is offloading a portion of its stake to unlock value. As a result, no fresh capital will be directly raised by the Indian company, with all proceeds going to the selling shareholder. The parent company’s stake will reduce, paving the way for the Indian arm’s listing.

Business and Fundamentals: LG Electronics India is a market leader in the consumer durables and home appliances segment, enjoying tremendous brand recall in the country. The company’s financials reflect strong operating leverage, with high Return on Equity (ROE) and Return on Capital Employed (ROCE) figures. Its dominant market share in key categories like washing machines, refrigerators, and air conditioners, coupled with its robust manufacturing and distribution network, provides strong growth visibility. The company’s future growth is linked to the broader trends of urbanisation, rising disposable incomes, and premiumisation in the Indian household.

Valuation and Market Perception: Market sentiment towards the LG IPO is notably buoyant, often reflected in a high Grey Market Premium (GMP), which suggests expectations of significant listing gains. While some analysts note the IPO’s valuation is at a premium compared to global peers, they justify it based on LG’s market leadership, strong profitability, and the high-growth trajectory of the Indian consumer durable sector.

The Investor’s Dilemma: A Head-to-Head Comparison

The simultaneous launch of these two mega issues presents a classic choice for investors, pitting the stability and trust of a financial conglomerate against the dominant growth of a consumer brand:

Feature	Tata Capital IPO	LG Electronics India IPO
Issue Size	Approx. ₹15,512 crore (Largest in 2025)	Approx. ₹11,607 crore
Issue Type	Fresh Issue (New Capital) + Offer for Sale (OFS)	Pure Offer for Sale (OFS)
Use of Proceeds	Augmenting Tier-I Capital to fund business growth	Proceeds go to the selling promoter (LG Electronics Inc.)
Sector	Financial Services (Diversified NBFC)	Consumer Durables and Electronics
Parentage/Brand	The prestigious Tata Group (High Trust Factor)	LG Electronics Inc., South Korea (Global Brand Leader)
Investment Theme	Play on India’s burgeoning credit demand, NBFC growth, and diversified lending portfolio.	Play on India’s rising disposable income, urbanisation, and premiumisation in the consumer electronics market.
Analyst View	“Subscribe for long-term,” valuing the brand strength and capital infusion for growth.	“Subscribe,” citing strong fundamentals, market leadership, and potential for high listing gains.

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Conclusion for Investors:

The choice between Tata Capital and LG Electronics India depends entirely on an investor’s risk appetite and investment horizon.

• For the Long-Term Investor seeking stable growth and capital protection, Tata Capital offers a compelling story. Its access to fresh capital for growth, diversification across lending segments, and the backing of the Tata name make it a fundamental play on the long-term expansion of India’s credit market.
• For the Investor seeking a potential ‘Listing Pop’ and exposure to a market-dominant consumer brand, LG Electronics India appears more attractive. Its pure OFS structure, coupled with its dominant position in a high-growth sector, has created significant excitement and a higher premium in the grey market, suggesting greater potential for immediate listing gains.

Ultimately, the market will decide how to price this unprecedented inflow of equity, making the twin IPO week a landmark event in the history of Dalal Street.