Midwest’s IPO, Persistent Systems and LG Electronics In the rapidly changing global technology and market landscape, three major names are making headlines these days—Midwest’s IPO, Persistent Systems, and LG Electronics. These three companies are not only redefining innovation in their respective fields but also presenting attractive opportunities for investors.
Midwest’s IPO (Quartz Processor Midwest) opened October 15 with a price band of ₹1,014–₹1,065 to raise ₹451 crore, backed by ₹135 crore in anchor commitments and a grey market premium (GMP) of ₹145 suggesting a potential listing gain; day‑1 subscription stood at about 41% overall with retail and NII interest but QIB bids still pending, while broker reviews note strong production leadership in Black Galaxy/Absolute Black granite, solid historical growth and returns but relatively premium valuations prompting a neutral stance.
Key Points
- Midwest’s IPO price band is ₹1,014–₹1,065 per share aiming to raise ₹451 crore, with the offer open from October 15–17, 2025.
- Anchor investors committed ₹135 crore, including Goldman Sachs India Equity Portfolio and Edelweiss Life Insurance.
- Day‑1 subscription was about 41% overall (retail 46%, NII 56%, employees 91%), with QIB bids yet to materialize.
- The reported grey market premium (GMP) is ₹145, implying an estimated listing price near ₹1,210 (≈13.6% above the upper band).
- Midwest is a leading producer/exporter of Black Galaxy and Absolute Black granite, with Absolute Black representing 10.8% of India’s black granite output in FY24.
- Financials show robust CAGR in Revenue/EBITDA/Adj.PAT (~11.6%/38.5%/40.5%) to FY25, with FY25 figures of ₹626 crore revenue, ₹172 crore EBITDA and ₹108 crore adjusted PAT.
- Valuation metrics at the upper band are priced at FY25 P/E ~35.8x and EV/EBITDA ~22.4x post-issue, reflecting a premium versus peers.
- The IPO comprises ₹250 crore fresh issue and up to ₹201 crore offer-for-sale by promoters, who currently hold 95.83% of shares.
- Promoters selling shares are Kollareddy Rama Raghava Reddy and Guntaka Ravindra Reddy; SVADHA India holds the remaining ~4.17% after a prior purchase.
- Lead managers and registrars include DAM Capital Advisors, Intensive Fiscal Services, Motilal Oswal Investment Advisors and Kfin Technologies Ltd.
- Brokerage SBICAP Securities rates the IPO NEUTRAL, citing capital‑intensive operations, respectable RoE/RoCE (17.4%/19.1%), but preferring to wait for listing performance.
Persistent Systems
Persistent Systems reported a strong Q2 FY26 with 45% YoY net profit growth, robust revenue and margin expansion, and significant contract wins (TCV 609.2m,ACV447.9m), prompting a >6% stock jump and several brokerages to raise target prices; analysts highlighted broad-based growth, improved profitability and management’s $2bn FY27 revenue target but warned that valuations remain high.
Key Points
- Persistent Systems’ Q2 consolidated net profit rose 45% YoY to Rs 471.4 crore, beating estimates.
- Revenue for the quarter increased 23.6% YoY to Rs 3,580.7 crore.
- Operating profit jumped 44% to Rs 583.7 crore, with operating margins improving to 16.3%.
- The company reported total contract value (TCV) of 609.2millionandannualcontractvalue(ACV)of447.9 million in Q2.
- Brokerages reacted positively: several raised target prices and the stock rose over 6% in early trade.
- CLSA gave a high-conviction outperform rating and raised its target, citing strong growth across order book, revenue, margins, ROE and free cash flow and a projected 29% EPS CAGR (FY25–27).
- HSBC upgraded its target to Rs 6,000 but retained a hold, noting improved profitability and deal-win recovery while cautioning on high valuation.
- Nomura maintained a neutral view with a Rs 5,200 target, raised EPS estimates for FY26–28 by 3–5%, and flagged a rich multiple (~37.5x FY27 EPS).
- Analysts emphasized Persistent’s software-engineering and managed-services strengths alongside margin benefits from lower software-license costs.
- Despite positive operational metrics and broker support, multiple analysts warned that elevated valuations could limit near-term upside.
LG Electronics
LG Electronics plans to leverage India’s growing software talent and manufacturing base to develop semiconductors, robotics, and AI, while expanding exports through New Delhi’s free-trade agreements; the company will increase local manufacturing (including a new ₹5,001 crore plant), double its India R&D headcount by 2027, and use India as a springboard into other Global South markets following a highly successful ₹11,607 crore IPO listing that valued LG Electronics India at about ₹1.15 lakh crore.
Key Points
- LG will harness Indian software expertise to develop semiconductors, robotics, and artificial intelligence technologies.
- The company plans to expand exports from India by leveraging India’s free trade agreements.
- LG is building a third manufacturing facility in Andhra Pradesh with a ₹5,001 crore investment to produce refrigerators, washing machines, air conditioners, and components.
- Management aims to double the India R&D workforce from 500 to 1,000 by 2027 to boost chip design and robotics capabilities.
- LG views India as moving from cost-competitive to capability-competitive, combining hardware cost advantages with strong software skills.
- The firm intends to use its India operations and experience to expand into other emerging markets across the Global South.
- LG Electronics India’s IPO raised ₹11,607 crore (offer-for-sale of 15%), was subscribed over 54 times, and its shares jumped nearly 50% on listing, valuing the company at about ₹1.15 lakh crore.
- LG already operates manufacturing units in Noida and Pune and provides B2C and B2B sales plus installation, repair, and maintenance services across its product range.
- Company growth expectations are supported by government incentives such as production-linked incentives that can boost manufacturing expansion.
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