Introduction: A Major Milestone for LG in India
LG Electronics Ltd., the South Korean electronics giant, is preparing to roll out the second-ever Indian IPO by a Korean company. With India now standing as the world’s third-largest stock market, the company aims to capture growing investor interest through a high-value offering that underscores its long-term commitment to the Indian market.
IPO Overview: Scale, Structure & Strategy
IPO Size and Offering Details
Valued at an impressive ₹11,607 crore, the LG Electronics India IPO is structured as a pure offer for sale (OFS) by the Korean parent company. No new shares will be issued, and hence, LG will not raise fresh capital. Instead, 10.18 crore shares—roughly 15% of the Indian unit—will be sold, reducing the parent’s holding to approximately 85% post-listing.
Book Runners and Lead Managers
Top-tier merchant bankers such as Kotak Mahindra Capital, Morgan Stanley India, and JM Financial are managing the issue, indicating the scale and prestige associated with this IPO.
Valuation and Price Band
Pricing the Market Entry
The price band has been fixed between ₹1,080 and ₹1,140 per share, valuing LG Electronics India at around ₹77,400–80,000 crore (approximately $8.7 billion). At the upper end, the IPO is valued at a P/E multiple of around 47x FY24 earnings—a premium over peers like Voltas, Blue Star, and Havells.
Strong Anchor Book Signals Market Confidence
Before opening to the public, LG Electronics India successfully raised ₹3,475 crore from anchor investors by allotting 3.04 crore shares at ₹1,140 apiece.
Notable participants in the anchor book include:
- Abu Dhabi Investment Authority
- Goldman Sachs
- BlackRock
- Government of Singapore
- SBI Mutual Fund
- HDFC Mutual Fund
Analysts view this robust institutional participation as a strong indicator of market confidence.
Important Dates and Bidding Details
- IPO Open Dates: 7 October to 9 October 2025
- Allotment Finalisation: 10 October 2025
- Listing Date: On or around 14 October 2025 (BSE & NSE)
- Lot Size: 13 shares
- Minimum Investment: ₹14,820 (at the upper price band)
Investor Allocation Breakdown
The IPO follows the standard allocation pattern:
- 50% for Qualified Institutional Buyers (QIBs)
- 35% for Retail Investors
- 15% for Non-Institutional Investors (NIIs)
Given LG India’s market dominance and financial resilience, strong demand is expected across all investor classes.
Business Overview: Market Leader in Consumer Electronics
Brand Strength and Product Leadership
LG Electronics India is a household name and a market leader in multiple product segments including:
- Refrigerators
- Washing machines
- Televisions
- Air conditioners
Competing with brands like Samsung, Whirlpool, and Godrej, LG has solidified its leadership with expansive distribution and after-sales service.
Manufacturing and Expansion
With major manufacturing hubs in Noida and Pune, the company boasts a wide-reaching operational footprint. In addition, LG has committed $600 million to a new facility in Sri City, Andhra Pradesh, to boost both domestic production and exports.
Financial Performance Snapshot
In FY24, LG Electronics India reported:
- Revenue: ₹26,782 crore
- Net Profit: ₹1,710 crore
- CAGR: ~10% over the last three years
Its operating margins stood at 9–10%, in line with top industry players. Return on Equity (RoE) was a healthy 22.6%, with negligible debt, underscoring robust financial management.
Risk Factors Investors Should Consider
High Import Dependence
Approximately 46% of raw materials are imported, leaving the business exposed to currency volatility and global supply chain risks.
Royalty Payments
The Indian subsidiary pays 2.4% of sales as royalty to its Korean parent for brand and technology usage, which can impact profitability margins.
Ongoing Tax Dispute
A significant ₹4,717 crore tax demand from Indian authorities poses potential legal and financial headwinds if not resolved in LG’s favor.
Fierce Market Competition
Intense rivalry from Indian and international players continues to pressure margins and forces the company to stay innovative and cost-efficient.
Grey Market Sentiment and Brokerage Opinions
The IPO is commanding a Grey Market Premium (GMP) of ₹250–270, implying potential listing gains of up to 25%.
Brokerages like Angel One, Motilal Oswal, and Ventura Securities have issued “Subscribe” recommendations, citing LG’s strong brand equity, financial strength, and long-term growth story. However, some analysts note that the issue appears fully priced and recommend a long-term investment horizon.
Strategic Vision and Broader Implications
For LG, this IPO isn’t just about unlocking value—it signals a deeper strategic intent to:
- Enhance corporate governance
- Promote local manufacturing
- Align with the ‘Make in India’ initiative
The listing also sets a precedent for other multinationals such as Samsung and Whirlpool, potentially inspiring similar IPOs in the Indian market.
Conclusion: A High-Profile Opportunity for Long-Term Investors
The LG Electronics India IPO presents a compelling opportunity to invest in one of the most reputable consumer electronics brands in India. While valuation concerns may warrant caution, the company’s strong fundamentals, wide market presence, and expansion initiatives make it an attractive option for long-term investors seeking exposure to India’s rising middle class and durable goods demand.
