LG Electric IPO - Read Before You Apply

LG Electronics India (LGEIL) is a wholly-owned subsidiary of South Korea’s LG Electronics Inc., operating in India’s consumer electronics and appliance market. Originally founded in 1958 as GoldStar (later rebranded LG Electronics in 1995)​, the global LG Group traces its roots to Lucky Chemical (1947) and Lucky-Goldstar (post-1958). LG entered India in 1997 with the establishment of LG Electronics India (then LG Electronics India Pvt. Ltd.)​m.economictimes.com​. Over time it has built one of the largest appliance portfolios in India, becoming a market leader in refrigerators, washing machines and other durables​.

LG India’s evolution reflects the parent company’s strategy: it has expanded from selling imported products to local manufacturing (factories in Noida and Ranjangaon, with a third plant planned) and extensive distribution. The company’s history in India is marked by rapid growth in revenues and market share in home appliances and consumer electronics. By FY2023–24, LG India had achieved record revenues (₹21,557 crore) and strong profitability​m.economictimes.com​zawya.com (see Financials below).

Products, Services and Business Segments

LG India’s business is broadly divided into home appliances & air solution and home entertainment (consumer electronics). Its product lines include:

• Refrigerators and freezers – Frost-free and direct-cool refrigerators, side-by-side refrigerators, freezers.
• Washing machines – Fully-automatic front-load and semi-automatic top-load washers.
• Air conditioners and air solutions – Window and split AC units, air purifiers, dehumidifiers, and AC compressors (notably, LG began making inverter AC compressors in Noida)​lg.com.
• Televisions and entertainment – Flat-screen LED/LCD TVs (including 4K UHD), audio systems, soundbars, monitors and signage displays.
• Kitchen appliances – Microwave ovens, built-in ovens and hobs, dishwashers, vacuum cleaners.
• IT and mobile – Personal computers and laptops (under its Commercial Products unit); LG recently exited the mobile phone business, though it still provides support for existing phones​telecom.economictimes.indiatimes.com.

In addition to products, LG India provides B2B solutions and after-sales services, including installation, repair and maintenance on all its offerings​livemint.com. The company serves both retail consumers and commercial clients across India and exports select products overseas. In FY2022, LG’s export revenues were nearly ₹976–1,086 crore reflecting its growing footprint beyond India.

As of FY2023, LG India reported that refrigerators accounted for 29% of sales, followed by washing machines (21%), air conditioners (20%) and televisions (19%). The home appliances divisions (fridge, washer, AC, etc.) together contribute the bulk of sales – over ₹14,000 crore in FY2023​. Mobile phone revenues are now minimal (only ₹133.3 crore in FY2022​) since LG shut down its handset unit.

Financial Performance

LG Electronics India has seen robust growth in recent years. Its revenue climbed from about ₹15,621 crore in FY2021 to ₹21,557 crore in FY2024​telecom.economictimes.indiatimes.com​zawya.com. Profitability has also been strong, with PAT bouncing back after a dip in FY2022.

Key financials (financial year ended March):

Fiscal Year End	Revenue (₹ crore)	Net Profit (₹ crore)	Exports (₹ crore)	Notes
Mar 2021	15,621	1,529	–	FY2021 results
Mar 2022	17,171	1,175	–	FY2022 results
Mar 2023	20,112	1,345	992	FY2023 results
Mar 2024	21,557	1,511	1,086	FY2024 results
Jun 2024 (Q1 FY25)	6,470	679	–	Q1 2024–25

(Exports: FY2023–24 export revenues.)

By FY2024, LG India’s net profit reached ₹1,511 crore (up 12% YoY) on revenue of ₹21,557 crore (up 7%)​ Its trailing profitability margins (~7% net margin in FY2024) are higher than many peers, reflecting a focus on premium products. Quarterly figures (e.g. Q1 FY2025 ended June 2024) also showed continued growth: net profit ₹679 crore and revenue ₹6,470 crore​. Export sales and service revenues have also ticked up, bolstering the topline.

These figures confirm LG India’s strong momentum. For FY2023 the home appliance segments alone exceeded ₹14,000 crore, illustrating dominance in core categories​. The company’s scale makes it India’s largest home-appliance maker, significantly outpacing peers (e.g. Samsung’s appliances sales were ₹11,844 crore in FY2023​m.economictimes.com).

Leadership and Ownership Structure

Before the IPO, LG Electronics Inc. (South Korea) owns 100% of LGE India. The Indian subsidiary is headed by Mr. Hong Ju Jeon, who was appointed Managing Director in January 2023​lg.com. Mr. Jeon previously led LG’s businesses in the Middle East. The global CEO of parent LG Electronics Inc. is William Cho, with LG Corp (the Koo family) as the ultimate promoter.

In India, LGEIL’s board and management team operate under LG’s global strategies but focus on local market needs. LG India employs thousands across its plants, sales offices and service centers. Major shareholders (pre-IPO) are simply LG Electronics Inc. and its nominee directors (the DRHP notes six nominee individuals acting for LG Electronics Inc. hold the entire equity​). After the IPO, LG Inc will remain the promoter with roughly 85% equity, while ~15% will be held by public investors (the IPO offers a 15% stake)​

IPO Details

Offering specifics

In December 2024, LG Electronics India filed a draft red herring prospectus (DRHP) with SEBI for an IPO of up to ₹15,000 crore​. The entire issue is structured as an offer-for-sale (OFS) by the promoter (no fresh equity issuance)​. LG Electronics Inc. plans to sell 101.8 million shares, representing 15.0% of equity​. At the proposed issue size of ₹15,000 crore, this implies a market capitalization of about ₹100,000 crore (roughly US$12–13 billion) for LGE India​.

Key IPO data (as reported):

• DRHP Filing Date: Dec 6, 2024​business-standard.com.
• Issue Size: ~₹15,000 crore (fully OFS)​m.economictimes.com.
• Equity Offered: 10.1816 crore shares (15% stake)​
• Implied Valuation: ~₹100,000 crore market cap​ (at ₹15k cr issue).
• Lead Managers/Bookrunners: Morgan Stanley, JP Morgan, Axis Capital, Bank of America Securities and Citi​
• Listing: BSE/NSE (Dalal Street) in India​.

Table: LG Electronics India IPO Snapshot

Parameter	Detail
Filing Date	Dec 6, 2024
Issue Type	Offer-for-Sale (no fresh issue) Source: business-standard.com
Equity Offered	10.18 crore shares (15% stake)
Issue Size	~₹15,000 crore
Valuation (at issue)	~₹1,00,000 crore market cap
Lead Managers	Morgan Stanley, JPM, Axis Cap, BofA, Citi
Planned Listing	NSE & BSE (India)
Tentative Timing	Originally Q2 2025 (May), deferred

Timing and Market Conditions

LG India had aimed for an IPO in May 2025 (Roadshows began April 2025), seeking to list in the second week of May​business-standard.com. It even obtained SEBI approval in March 2025 and hosted investor roadshows​. However, in late April 2025 the company postponed the IPO to at least Q3 2025​, citing “unfavorable” market conditions​. Sources indicate global stock volatility and muted investor demand at LG’s high valuation range (implying ~30–35x P/E) led to the delay​. Some insiders expect a reopening of the IPO once improved conditions materialize (perhaps after India’s festive season)​.

Use of Proceeds and Rationale

Because the IPO is 100% OFS​business-standard.com, LG Electronics India itself will not receive the IPO funds. All ₹15,000 crore (approx.) raised goes to the parent as promoter selling shareholder​. Thus use-of-proceeds is effectively a strategic matter for LG Electronics Inc. Nevertheless, the IPO serves key objectives:

• Capital for expansion: The LG Group plans major investments in India. For instance, LG has proposed spending ₹7,000 crore (LG ₹5,000 cr, vendors ₹2,000 cr) to build a third factory in Andhra Pradesh (Sri City), adding capacity for ACs, refrigerators, washing machines and TVs​. The IPO proceeds (to the parent) may help fund such growth initiatives.
• Market expansion: The offering is touted as a way to fuel LG India’s growth in Asia and Africa​livemint.com. Management stated the IPO would support expansion into new regions, reducing reliance on North American markets after recent US import tariffs​.
• Monetization and valuation: The sale allows LG Electronics Inc. to partially monetize a portion of its India investment. It brings greater price discovery and publicly bench-marked valuation for LG’s India business, aiding in capital allocation for the group.
• Corporate visibility: A local listing raises LG’s profile in India’s capital markets and provides an exit route for institutional investors down the road.

Thus, while LG India itself gains no new cash, the IPO aligns with LG Corp’s strategy of funding aggressive expansion in India and neighboring markets. The regulatory filings emphasize that the issue proceeds will go to LG Electronics Inc.​

Competitive Landscape

LG India operates in a highly competitive market. Its main rivals vary by segment:

• In refrigerators and microwaves, LG leads, followed by Samsung and Whirlpool.
• In washing machines, Whirlpool (under Whirlpool of India) is a close contender.
• In air conditioners, Voltas (a Tata subsidiary) and Daikin are major competitors (LG is currently #2 behind Voltas​m.economictimes.com). Blue Star and Samsung also compete in HVAC.
• In televisions, Samsung and Sony are key rivals; LG is among the top two brands in TV sales​.
• In consumer electronics and appliances, other players include Haier (Sanyo), Panasonic, Godrej & Boyce, Videocon (legacy brand), Haier, and smaller local brands (IFB, Godrej).
• Peer companies in India’s market (listed or prominent in appliances) include Havells, Voltas, Whirlpool, Blue Star, etc. (For context, Voltas’s FY2024 turnover was ₹12,481 cr and profit ₹248 cr​, highlighting LG’s much larger scale.)

LG typically competes on product innovation and premium features (e.g. inverter tech, IoT connectivity via ThinQ), leveraging its global R&D. Its brand enjoys strong recognition (“Life’s Good” theme). Nevertheless, pricing pressure and new entrants (including cheaper Chinese brands in some categories) are risks. The company cites its market leadership “by a mile” in core categories​, but analysts note that maintaining growth will require continual innovation and marketing.

Post-IPO Strategy and Outlook

After listing, LG India is expected to pursue a growth-oriented strategy:

• Capacity expansion: As noted, a third manufacturing unit in Andhra Pradesh (Sri City) is planned, co-funded by LG and its suppliers​. This will boost production of ACs, fridges, washers and TVs. Completion is aimed in coming years.
• Geographic expansion: The IPO is partly aimed at funding deeper penetration into other Asian and African markets​. LG India may increase exports of its products (exports were ₹1,086 cr in FY2024​) and explore new distribution ties in emerging markets.
• Innovation and premiumization: LG will likely continue focusing on premium features (large-capacity, smart appliances) to differentiate. It may accelerate launches of smart (IoT-enabled) products via its ThinQ platform. For example, LG India already offers solar rooftop panels, robotic vacuum cleaners, and wearable air purifiers, signaling R&D orientation.
• Digital and e-commerce: The company is expected to strengthen its omni-channel presence, including online sales and after-sales digital services. LG has been a sponsor in Indian sports/events to boost brand pull, a trend likely to continue.
• Potential M&A or partnerships: No major acquisitions are reported yet, but LG has signaled interest in battery manufacturing (separate arm LG Energy Solution is active globally) and electric vehicle components, which could tangentially involve the India subsidiary.

In sum, post-IPO LGE India aims to leverage increased capital access and market visibility to accelerate production capacity, diversify markets, and roll out new product lines. Analysts note LG’s “stable two-digit growth rate” so far​, but caution that the company must adapt to India’s dynamic market to maintain momentum.

Risks and Challenges

Investors considering the LG India IPO should be aware of several risks:

• Market Volatility and Valuation Risk: Equity markets have shown volatility. The IPO was delayed due to stock market jitters and investors balking at LG’s high valuation (market was valuing LG India at ~30–35x forward earnings, below industry average)​. If LG does not sufficiently price the issue or waits too long, demand might wane.
• Macroeconomic Uncertainty: India’s growth outlook, inflation, and consumer demand fluctuations could impact LG’s sales. In particular, the recent US tariffs on imports (announced by the U.S. government) create uncertainty for exports and for any LG products sourced from the U.S.​business-standard.com.
• Regulatory Challenges: India has tightened regulations on electronics – for example, new e-waste rules increase recycling costs for appliance makers​.LG (like Daikin and Samsung) is contesting higher recycling fees, which could raise compliance costs and margins. Changing trade policies or import duties (on components) also pose risks.
• Intense Competition: The appliance market is fiercely competitive on price and features. Rivals like Samsung, Whirlpool, Haier, Panasonic and local brands constantly innovate and discount. A significant share loss to aggressive competitors is possible, especially in price-sensitive segments.
• No Fresh Capital for LG India: Since the IPO is entirely OFS, LG Electronics India itself receives no infusion of cash. Its expansion plans (new plant, etc.) rely on parent funding. Should the parent’s priorities shift, LG India may face resource constraints.
• Project Execution: The proposed new factory (Sri City) is a large investment (₹7,000 cr). Execution delays or cost overruns could occur, and failure to ramp capacity as planned would limit growth.
• Currency Fluctuations: LG imports components and exports products; large swings in the rupee (versus dollar or won) could hurt profitability.
• Parent Company Exposure: LG India’s fortunes are tied to its Korean parent. Any global downturn in LG Corp (e.g. in TVs or smartphones) or credit issues could indirectly affect LG India’s strategy or brand perception.

Overall, while the fundamentals are strong, investors should consider these factors. Market experts have noted that the IPO’s success hinges on investor appetite at a relatively rich valuation​ and that near-term softness in demand (e.g. ahead of Diwali) could impact LG’s results.

Final Word

LG Electronics India stands as the country’s largest home appliances and consumer electronics maker, with a proven growth track record and strong brand. Its IPO (expected in late 2025) will be one of India’s biggest offerings, underpinned by a ₹100,000+ crore valuation. The proceeds (to the parent) will support LG’s aggressive expansion – notably a new Andhra Pradesh plant – and geographic diversification. Investors will look for continued revenue and profit growth, as LG leverages its premium product focus. Key competitive pressures, macroeconomic uncertainties and regulatory changes are risks to monitor. In summary, the LG India IPO represents a landmark event reflecting confidence in India’s appliance sector, but hinges on market conditions and the company’s execution of its growth plans.

Disclaimer: The information provided in this article is for educational and informational purposes only. It should not be considered financial advice or a recommendation to invest. Please consult with a qualified financial advisor or do your own research before making any investment decisions. The author and publisher are not responsible for any losses or damages arising from reliance on the information presented.