LG Electronics India Limited, a subsidiary of the South Korean multinational LG Electronics, is all set to launch its ₹15,000 crore initial public offering (IPO) in 2025. With a history of market leadership in India’s consumer electronics and home appliances sectors, the company has established itself as one of the most trusted brands in Indian households since its entry in 1997.
This Offer for Sale (OFS) will see LG Electronics Inc., the parent company, divesting 15% of its stake (a total of 101.8 million shares). The proceeds from the sale will be retained by the parent company, and no funds will be raised for the Indian subsidiary itself.
Key IPO Details
- IPO Opening Date: First week of March 2025 (expected)
- IPO Closing Date: First week of March 2025 (expected)
- Price Band: ₹265 per share (expected)
- Face Value: ₹10 per share
- Total Issue Size: ₹15,000 crore
- Offer for Sale: ₹15,000 crore
- Listing At: BSE and NSE
- Listing Date: Second week of March 2025 (expected)
Investor Allocation:
- 35% Reserved for Retail Investors
- 50% Reserved for Qualified Institutional Buyers (QIB)
- 15% Reserved for Non-Institutional Investors (NII)
Market Leadership and Growth Prospects
For 13 years (2011-2023), LG Electronics India has held its ground as the market leader in major appliances, including washing machines, refrigerators, air conditioners, and microwaves. The company has developed a robust distribution network and offers exceptional after-sales services, ensuring strong customer loyalty and satisfaction.
As India’s appliances and electronics market continues to grow, LG is poised to benefit from the accelerating demand. The market is projected to grow by 12% annually over the next five years, driven by trends like rising disposable incomes, urbanization, and increasing rural penetration of consumer electronics. By 2028, India’s market for appliances and electronics is expected to reach ₹10,060 billion, providing a significant opportunity for growth.
Financial Overview
LG Electronics India’s financial performance has shown resilience despite challenges. Here’s a breakdown of the key financials:
| Particulars | FY 2022 | FY 2023 | Q1 FY 2024 |
| Revenue (₹ in million) | ₹168,342.13 | ₹198,645.93 | ₹64,087.97 |
| Profit After Tax (PAT) | ₹11,747.33 | ₹13,449.30 | ₹6,796.46 |
| Earnings Per Share (EPS) | ₹17.31 | ₹19.81 | ₹10.01 |
| Return on Net Worth (RoNW) | 21.50% | 31.13% | 15.39% |
| Total Assets (₹ in million) | ₹94,192.38 | ₹89,921.20 | ₹92,530.53 |
| Net Worth (₹ in million) | ₹54,643.20 | ₹43,198.20 | ₹37,358.20 |
| Debt-Equity Ratio | 0.05 | 0.07 | – |
| Inventory Turnover Ratio | 6.71 | 7.85 | – |
Strengths of LG Electronics India
- Brand Strength and Market Presence
LG Electronics India has consistently maintained a strong brand reputation. It is well known for its high-quality products, including OLED TVs, smart refrigerators, and air conditioners. The company’s “G-local” strategy adapts global products to meet local preferences, which has contributed significantly to its sustained market dominance. - Efficient Operations
LG Electronics India benefits from its local manufacturing capabilities. The company operates two state-of-the-art production plants in Noida and Pune, ensuring cost efficiency and the ability to meet growing market demand. 97-98% of LG’s products are manufactured in India, which helps maintain competitive pricing and fast delivery timelines. - Robust Distribution Network
LG’s extensive distribution network includes 280 suppliers and 25 warehouses, including two central and 23 regional distribution centres, which enable the company to maintain quick and reliable product deliveries across the country. This setup plays a crucial role in ensuring products are readily available to consumers, even in remote areas. - Innovative and Eco-Friendly Products
LG’s products are not only technologically advanced but also designed to be energy-efficient and eco-friendly, aligning with the growing consumer demand for sustainable solutions. The company’s continuous innovation in smart home appliances and energy-saving technologies positions it well to capture a significant share of the rapidly evolving consumer electronics market.
Risks and Challenges
Despite its strong position in the market, LG Electronics India faces several challenges:
- Intense Competition
LG competes with some of the biggest names in the industry, such as Samsung, Whirlpool, and Voltas, all of which constantly innovate and compete on pricing. This competition could pressure LG’s market share and profit margins. - Dependence on Parent Company
As a subsidiary of LG Electronics Inc., the company relies heavily on the parent for technology, intellectual property, and product designs. Disruptions in these areas could affect its operations. - Supply Chain Risks
LG is vulnerable to global supply chain disruptions, such as natural disasters, pandemics, or geopolitical tensions, which could lead to delays in manufacturing and rising material costs, affecting overall profitability. - Economic and Regulatory Risks
The company faces exposure to fluctuations in global commodity prices, currency volatility, and changing regulations. These factors could affect profitability and introduce operational risks.
Conclusion: Why Investors Should Consider LG Electronics India IPO
LG Electronics India stands out as a market leader with a strong financial track record, a well-established brand, and an innovative product portfolio. The ₹15,000 crore IPO offers a significant opportunity for investors to participate in one of India’s leading consumer electronics giants as the company expands further in the growing Indian market.
However, investors should consider the risks, particularly from competition, operational dependencies, and global economic factors. With India’s consumer electronics and home appliances market poised for continued growth, LG Electronics India remains well-positioned to capitalize on these opportunities.
