LG Electronics India Limited IPO

8 Oct 2025 , 11:10 AM

LG Electronics India Limited designs, manufactures, and markets a broad portfolio of home appliances and consumer electronics (excluding mobile phones), ranging from refrigerators, washing machines, and air conditioners to flat-panel televisions and digital signage displays. The company operates under the globally recognized “LG” brand and leverages the technology, design, and supply chain capabilities of its sole promoter, LG Electronics Inc., South Korea.

Its IPO is an Offer for Sale (OFS), enabling the promoter to monetize a portion of its shareholding.

Offer details of the IPO

• Total Offer Size –INR 11,606.91 crore. The issue comprises an offer for sale of up to 101,815,859 equity shares.
• The shares being sold by the existing shareholder are held by:
• LG Electronics Inc. (Promoter) – 101,815,859 shares

Price Band: INR 1080 to INR 1140 per Equity Share

Book‑Running Lead Managers

• Axis Capital Limited
• BofA Securities India Limited
• P. Morgan India Private Limited
• Citigroup Global Markets India Private Limited
• Morgan Stanley India Company Private Limited

Indian Appliances & Electronics Market – Overview

The Indian appliances and electronics market is growing rapidly and is highly competitive, serving both consumers (B2C) and businesses (B2B). Growth is being driven by several factors: rising disposable incomes, fast urbanisation, the “Make in India” initiative, and Production‑Linked Incentive (PLI) schemes. At the same time, consumers are increasingly preferring premium, connected, and energy-efficient products. Companies that focus on product innovation, strong brand reputation, and a flexible local supply chain are best positioned to take advantage of this expanding market.

Table: Key Segments

Segment	Core product families/services	Typical end‑users
Major Home Appliances	Refrigerators, washing‑machines, inverter air‑conditioners, microwaves, dish‑washers, water‑purifiers, built‑in kitchen units, small appliances (vacuum cleaners, air‑purifiers, water‑heaters, etc.)	Households – both urban and increasingly rural / semi‑urban
Consumer Electronics	Panel televisions (4K/Smart/OLED), monitors, audio‑visual systems, gaming consoles & accessories, wearables, e‑readers, and personal care gadgets	Households, young‑adult segment, gamers and tech‑savvy consumers
After‑sales Services & Subscriptions	Annual‑maintenance contracts (AMCs), appliance‑rental & “Careship” subscription models, repair & refurbishment services	All B2C buyers (especially premium‑segment purchasers) and B2B institutional users (hospitality, corporate offices)

Source: RHP

These three pillars together account for ≈ 95 % of the total B2C market value (the remaining ≈ 5 % is made up of ancillary services such as financing, logistics and warranty‑related revenue).

Table: Growth Snapshot

Segment (B2C)	Past CAGR (CY 2019 → CY 2024)	Future CAGR (CY 2024 → CY 2029)	Comment
Overall Appliances & Electronics (incl. all categories)	≈ 7 % – driven by early‑stage penetration, expanding e‑commerce and the first wave of premiumisation.	≈ 11 % – accelerated by higher household disposable income, deeper rural reach, and continued rollout of Make‑in‑India manufacturing capacity.	The market is moving from a “penetration‑only” phase to a “premium‑and‑replacement” phase, with a clear shift toward locally‑made, energy‑efficient products.
Major Home Appliances (refrigerators, washing machines, ACs, microwaves, kitchen appliances)	≈ 10 % – strong growth in inverter‑ACs (≈ 16 % CAGR) and refrigerators (≈ 7 % CAGR).	≈ 13–14 % – supported by rising middle‑class size, financing schemes and the rollout of smart‑home‑ready appliances.	Inverter technology now dominates (≈ 80 % of ACs sold) and will continue to be a key differentiator.
Consumer Electronics (TVs, monitors, audio, gaming, wearables)	≈ 10 % – buoyed by rapid adoption of 4K/Smart TVs and gaming peripherals.	≈ 12 % – fueled by higher demand for immersive entertainment (gaming, VR) and connected‑home devices.	Gaming monitors and high‑refresh‑rate panels are the fastest‑growing sub‑segment, reflecting India’s expanding e‑sports ecosystem.
After‑sales Services & Subscriptions	≈ 5 % – nascent but growing as consumers seek convenience and warranty coverage.	≈ 9–10 % – driven by the rollout of “Careship” subscription models and increasing willingness to pay for hassle‑free ownership.	Service‑based revenue is expected to become a larger share of total earnings as premium‑segment penetration deepens.

Source: RHP

• The overall market is expected to grow faster than before, increasing from a 7 % CAGR to an 11 % CAGR over the next five years.
• Major home appliances will continue to drive growth, with inverter air-conditioners and smart refrigerators leading the segment.
• Consumer electronics growth will be fueled by premium TVs, gaming, and wearables, creating high-margin opportunities.
• Services and subscription models will evolve from a minor stream to a strategic profit centre, supporting brand loyalty and recurring revenue.

LG Electronics India Limited – Company Overview

LG Electronics India Limited is a wholly-owned subsidiary of LG Electronics Inc., South Korea, manufacturing and selling home appliances and consumer electronics in India and for export. Key management includes Hong Ju Jeon (MD) and Dongmyung Seo (CFO). It has manufacturing facilities in Noida and Pune. A new manufacturing facility in Tirupati is expected to be operational from 2027 onwards. It serves both consumer and commercial markets.

Competitive Positioning

LG Electronics India holds the #1 market share in major home-appliance and consumer-electronics categories in offline channel (≈approximately 78 % of the major home-appliance and consumer-electronics market is offline) and is among Interbrand’s Top 100 global brands. It offers a wide product portfolio, including TVs, refrigerators, air conditioners, and related services, supported by an extensive distribution network and a strong after-sales service. Leveraging LG Group’s global R&D and integrated supply chain, it delivers energy-efficient, high-quality products across India and for exports.

Strengths

• Brand Equity – Immediate consumer trust and premium pricing power.
• Technology Access – Licensed patents, design and engineering know‑how from a global leader.
• Scale & Procurement – Ability to source components at competitive rates through the LG Group.
• Distribution & Service Network – Established dealer and service infrastructure across India.
• Financial Backing – Strong parent‑company balance sheet; ability to obtain guarantees and credit facilities.

Weaknesses

• Royalty Burden – Ongoing royalty payments (≈ 2.3 %–2.4 % of net sales) plus potential additional royalty adjustments from tax settlements.
• Related‑Party Exposure – Significant intra‑group transactions (raw material purchases, finished‑goods sales, service‑warranty claims) may affect margins and create conflict‑of‑interest concerns.
• Tax & Legal Contingencies – Ongoing MAP and tax disputes could result in additional liabilities or cash outflows.
• Competitive Landscape – Intense competition from domestic players (e.g., Voltas, Godrej) and other global brands (Samsung, Sony, Panasonic) – price wars and rapid technology cycles.
• Export Dependence – Export volumes are largely driven by LG Electronics’ global strategy; any change in export policy or regional demand can affect revenue.

Financial Profile

Robust Revenue Growth: LG Electronics India Limited’s revenue rose from ₹198,682 mn in FY 2023 to ₹213,520 mn in FY 2024 (+7.47% YoY) and ₹243,666 mn in FY 2025 (+14.12% YoY), reflecting a CAGR of ≈11% over FY 2023–25. Other income rose 28.7% YoY, and royalty expenses to the promoter increased 12.74% YoY. Net profit, PBT, and net worth also improved significantly, supported by scale economies, a premium product mix, and improved operational efficiency.

Better Profitability: Royalty expense stayed ~1.9% of revenue (1.89% in FY 2024; 1.87% in FY 2025), while other income rose 28.7% YoY. Operating cash flow was strong (₹16,654.61 mn in FY 2024; ₹16,538.92 mn in FY 2025), supported by scale economies, a premium product mix, and operational efficiency. EBITDA margin increased from 10.42% to 12.76% and net profit margin from 7.01% to 8.95%, indicating stronger margins and improved operational performance.

Table: Peers Comparison

Name of the company	Closing price as of September 26, 2025  (₹ per share)	Revenue from operations (in ₹ million)	EPS  Basic (₹)	EPS Diluted (₹)	NAV Per Equity Share	PE ratio
LG Electronics India Limited	1,140.00	243,666.38	32.46	32.46	87.42	35.12*
Havells	1,506.60	217,780.60	23.49	23.48	133.05	64.14
Voltas	1,339.70	154,127.90	25.43	25.43	197.66	52.68
Whirlpool	1,232.00	79,193.70	28.30	28.30	314.52	43.53
Blue Star	1,886.35	119,676.50	28.76	28.76	149.19	65.59

Source: RHP; * – based on upper end of price band

 

Table: KPI Comparison

Company	Particular (Unit)	FY 2023	FY 2024	FY 2025	CAGR
LG Electronics India Limited	Revenue from Operations (₹ million)	198,682.39	213,520.00	243,666.38	11%
	Revenue Growth (year-on-year) (%)	–	7.47	14.12	–
	Revenue from Home Appliances and Air Solutions (₹ million)	150,306.78	156,797.49	182,678.57	–
	Revenue from Home Appliances and Air Solutions as a percentage of Revenue from Operations (%)	75.65	73.43	74.97	–
	Revenue from Home Entertainment (₹ million)	48,339.15	56,722.51	60,987.81	–
	Revenue from Home Entertainment as a percentage of Revenue from Operations (%)	24.33	26.57	25.03	–
	Profit for the period/year (₹ million)	13,449.30	15,110.68	22,033.48	28%
	EBITDA (₹ million)	18,951.15	22,248.73	31,101.24	28%
	EBITDA Margin (%)	9.54	10.42	12.76	–
	Profit Margin (%)	6.69	7.01	8.95	–
	Return on Capital Employed (%)	34.38	45.31	42.91	–
	Return on Net Worth (%)	31.13	40.45	37.13	–
	Number of LG Brand Shops	814	780	800	–
	Number of B2C touch points	34,874	35,833	36,230	–
Havells	Revenue from Operations (₹ million)	169,107.30	185,900.10	217,780.60	13%
	Revenue Growth (year-on-year) (%)	–	9.93	17.15	–
	Profit for the period/year (₹ million)	10,717.30	12,707.60	14,702.40	17%
	EBITDA (₹ million)	15,991.40	18,426.20	21,308.60	19%
	EBITDA Margin (%)	9.46	9.91	9.78	–
	Profit Margin (%)	6.27	6.75	6.66	–
	Return on Capital Employed (%)	19.03	19.41	19.98	–
	Return on Net Worth (%)	16.18	17.06	17.63	–
	Brand Shops	NA	900+	1,000+	–
Whirlpool	Revenue from Operations (₹ million)	66,676.50	68,297.90	79,193.70	9%
	Revenue Growth (year-on-year) (%)	–	2.43	15.95	–
	Profit for the period/year (₹ million)	2,240.10	2,243.00	3,627.80	27%
	EBITDA (₹ million)	3,703.40	3,840.80	5,573.20	23%
	EBITDA Margin (%)	5.55	5.62	7.04	–
	Profit Margin (%)	3.30	3.21	4.47	–
	Return on Capital Employed (%)	4.89	4.26	8.05	–
	Return on Net Worth (%)	6.11	5.84	9.09	–
Voltas	Revenue from Operations (₹ million)	94,987.70	124,812.10	154,127.90	27%
	Revenue Growth (year-on-year) (%)	–	31.40	23.49	–
	Profit for the period/year (₹ million)	1,362.20	2,481.10	8,342.80	150%
	EBITDA (₹ million)	2,079.00	3,360.10	9,901.80	127%
	EBITDA Margin (%)	2.19	2.69	6.42	–
	Profit Margin (%)	1.41	1.95	5.30	–
	Return on Capital Employed (%)	2.74	4.37	12.49	–
	Return on Net Worth (%)	2.48	4.24	12.76	–
	Brand Shops	260+	320+	400+	–
Blue Star	Revenue from Operations (₹ million)	79,773.20	96,853.60	119,676.50	22%
	Revenue Growth (year-on-year) (%)	–	21.41	23.56	–
	Profit for the period/year (₹ million)	4,006.90	4,143.10	5,912.80	21%
	EBITDA (₹ million)	6,639.90	6,654.30	8,871.00	16%
	EBITDA Margin (%)	8.32	6.87	7.41	–
	Profit Margin (%)	5.00	4.26	4.91	–
	Return on Capital Employed (%)	29.02	19.88	22.00	–
	Return on Net Worth (%)	30.04	15.86	19.27	–

Source: RHP