In today’s briefing:
- Tata Motors (TTMT IN) Demerger: Interesting Index Implications
- Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (6 Oct)
- LG Electronics India IPO: Attractive Upside
- LG Electronics India IPO: Leading Player Priced at a Steep Discount ?
Tata Motors (TTMT IN) Demerger: Interesting Index Implications
- Tata Motors (TTMT IN) is demerging the company into two separate listed entities that will focus on the Passenger Vehicle business and the Commercial Vehicle businesses.
- Based on the estimated valuation for the two entities, both stocks will continue to remain in the MGlobal Index and the FGlobal Index.
- NIFTY and SENSEX trackers will need to sell their Commercial Vehicle business holdings soon after listing. There could be selling in the Passenger Vehicle business holdings at a later rebalance.
Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (6 Oct)
- Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
- Highlights: Currently nine pair trade opportunities across four markets and five sectors persist.
- Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.
LG Electronics India IPO: Attractive Upside
- After incorporating the company’s FY25 results, we have tweaked our income statement estimates and valuations of LG Electronics India IPO.
- Our base case valuation is target price of 1,514 INR which is 33% higher than the high end of the IPO price range.
- It appears that the company wants the IPO to be successful and after much review the company has decided to price the IPO at more attractive levels to new investors.
LG Electronics India IPO: Leading Player Priced at a Steep Discount ?
- LG Electronics (066570 KS) will divest a 15% stake in its 100% subsidiary LG Electronics India (123D IN) through an IPO, raising Rs116 billion (USD 1.3 billion).
- The IPO pricing implies a valuation well below that of listed Indian peers and appears to overlook the sector’s underlying near term macro demand tailwinds.
- LGEIL’s 1QFY26 financial performance came in weak, primarily due to a seasonal slowdown in cooling product sales, particularly air conditioners. This follows a strong FY2025.
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