India’s stock market witnessed a moment of confusion on Tuesday as the share price of auto parts manufacturer LG Balakrishnan & Bros Ltd. jumped to new highs without an apparent trigger.
LG Balakrishnan & Bros Ltd. became a surprise beneficiary of the bumper listing of LG Electronics India shares at the BSE and NSE on Tuesday, as the company listed after its mega IPO (initial public offering).
Why did LG Balakrishnan stock price surge?
As per a report by The Economic Times, citing brokers, investors who rushed to buy LG Electronic shares mistakenly added buy calls for the LG Balakrishnan scrip.
As a result, the LG Balakrishnan stock price surged to new highs on Tuesday. The shares of LG Balakrishnan hit a 52-week high of ₹1,640 on the BSE during early trade, which represented roughly a 15 per cent gain over its closing price of ₹1,367.60 on Monday.
However, investors quickly realised their mistake and withdrew from the investment. As a result, LG Balakrishnan share price started to tumble, with the stock closing with a loss of almost 2 per cent.
Is LG Balakrishnan related to LG Electronics India?
LG Balakrishnan has no relation to LG Electronics India. The former has been listed on the stock markets for a long time, while the latter made its market debut after a the mega LG India IPO on Tuesday.
Established in 1937, LG Balakrishnan is a leading manufacturer of auto components. Based in Coimbatore, Tamil Nadu, the company is a leading player in transmission products with its automotive timing and drive chains, sprockets, auto tensioners, guides, and more.
Meanwhile, LG Electronics India is the domestic arm of the South Korean electronics major LG, which sells products like AC, televisions, fridge and more.
The market capitalisation of LG Electronics India is ₹1.14 crore, as compared to a ₹4,300 market cap of LG Balakrishnan.
LG Electronics India share price
Shares of LG Electronics India Ltd on Tuesday made a stunning market debut and ended with a premium of over 48 per cent against the issue price of ₹ ₹1,140.
The stock started trading at ₹1,715, surging 50.43 per cent from the issue price on the BSE. During the day, it zoomed 52.31 per cent to ₹1,736.40. Shares of the firm ended at ₹1,689.40, up 48.19 per cent.
On the NSE, the stock made its market debut at ₹1,710.10, registering a premium of 50 per cent. Shares of the firm later ended 48.23 per cent higher at ₹1,689.90.
LG Electronics India IPO
LG Electronics IPO opened for public subscription on October 7 and closed on October 9.
The LG Electronics India IPO received 54.02 times subscription on the final day of bidding on Thursday, driven by overwhelming participation from institutional buyers.
The ₹11,607-crore IPO had a price band of ₹1,080 to ₹1,140 per share.
