Should You Invest In LG Electronics IPO 2025? Best Insights

Should You Invest in LG Electronics IPO

The consumer durables industry in India is on a robust growth trajectory, driven by urbanization, rising disposable incomes, and increasing adoption of smart, energy-efficient appliances. The Indian consumer durables market is projected to grow at a CAGR of over 10%, reaching INR 3.15 lakh crores by 2030. This growth is supported by initiatives like “Make in India” and production-linked incentives (PLI), which bolster domestic manufacturing and exports.

Key drivers include technological advancements in IoT-enabled appliances, rising demand from rural markets due to electrification, and premiumization trends. Globally, the market’s size, pegged at USD 1.2 trillion in 2023, is growing at a steady CAGR of 5.6% over the next five years, with the Asia-Pacific region leading the demand surge. In this competitive landscape, companies like LG Electronics India, Havells, Polycab, and Voltas stand out with strong portfolios and expansive distribution networks.

LG Electronics IPO is a leader in this segment.

LG Electronics India, a subsidiary of LG Electronics Inc., has played a crucial role in shaping India’s consumer durables market since its inception in 1997. LG Electronics has been a well-known home brand in India for a long time now. The company boasts a diverse product portfolio across segments like home appliances, air conditioners, and smart electronics. Its market position is reinforced by a strong distribution network and a reputation for innovation and quality.

LG Electronics IPO Size

The company is coming up with an initial offering and filed DRHP in December 2024. LG Electronics IPO consists of only offers for sale. Up to 101,815,859 equity shares of face value of ₹ 10 each are offered for sale in this IPO process. The complete process of this IPO will go to shareholders who are selling their stake in this process.

Objective of the LG Electronics IPO

The IPO by LG Electronics India aims to achieve several strategic objectives:

Enhance Brand Equity: Listing will bolster its public profile and credibility in the competitive Indian market.
Unlock Shareholder Value: The offer for sale (OFS) of up to 101.8 million equity shares by the promoter, LG Electronics Inc., allows the parent company to monetize a part of its investment.
Capital Mobilization for Expansion: Although the IPO primarily involves an OFS, it indirectly supports growth initiatives by enhancing market presence and investor confidence.

Also Read: Top 5 Best Consumer Durable Stocks in India

LG Electronics IPO Management and Leadership

LG Electronics India’s management team, led by seasoned professionals with decades of experience, is a cornerstone of its success. Their strategic focus on innovation, sustainability, and customer-centricity has driven consistent growth. The integration of global expertise from its parent company further strengthens its leadership position. The company’s ability to adapt to dynamic market demands and launch cutting-edge products underscores the competency of its leadership.

LG Electronics IPO Details: Revenue Potential and Growth Drivers

LG Electronics India reported consolidated revenue of INR 15,634 crore in FY24, growing at a CAGR of 12% over the past five years. Key revenue drivers include:

Premium Products: High-margin offerings such as IoT-enabled air conditioners and OLED TVs.
Geographic Expansion: Penetration into tier-2 and tier-3 cities with localized marketing strategies.
Consumer Trends: Increasing adoption of energy-efficient appliances due to rising environmental consciousness.

Future growth is expected to be driven by:

Rural Market Potential: Electrification and rising incomes are unlocking demand in untapped rural areas.
Sustainability Initiatives: Products adhering to global energy efficiency standards are gaining traction.
PLI Benefits: Incentives under the PLI scheme strengthen manufacturing capabilities and reduce import dependency.

LG Electronics IPO Peer Comparison and Competitive Positioning

In comparison to peers like Havells, Polycab, and Voltas, LG Electronics India holds a leadership position in several product categories. However, competition is intensifying with players like Havells making significant strides in the premium appliance market and Polycab’s rapid growth in the FMEG segment. LG’s global expertise, robust R&D capabilities, and established brand equity give it a competitive edge, particularly in high-tech, energy-efficient appliances.

LG Electronics IPO New Products and Expansion Plans

LG’s aggressive push into IoT-enabled smart appliances and its commitment to launching energy-efficient products cater to sustainability-focused consumers. Its recent investments in expanding manufacturing facilities in Greater Noida and other regions ensure scalability to meet future demand. Additionally, LG is targeting global markets with localized innovations.

Compared with its peers, Havells is focusing on premium appliances and expanding capacity for its Lloyd AC plants. Polycab is investing in FMEG production facilities and global market expansion. Voltas is expanding its UCP production capabilities but remains heavily dependent on this segment. V-Guard is investing in modular switches and stabilizers but lags in IoT adoption and high-tech appliances.

Risks and Mitigation

While the company’s growth potential is strong, it faces challenges such as:

Raw Material Volatility: Dependence on imports for key components exposes it to price fluctuations.
Intense Competition: Market dynamics are shifting with the entry of new domestic and global players.
Regulatory Changes: Stringent environmental norms could impact operations.

To mitigate these risks, LG Electronics India is focusing on backward integration, expanding local manufacturing, and leveraging its global supply chain expertise.

LG Electronics IPO Valuation

The valuation of LG Electronics IPO depends on its pricing in comparison to peers and the growth potential of the Indian consumer durables market. LG’s strong brand equity, leadership in premium product categories, and alignment with market trends support its valuation. Peers like Havells trade at high P/E multiples (~50x earnings), reflecting investor confidence in the sector’s growth. If LG’s IPO valuation aligns with similar multiples and is supported by its growth trajectory, it could be considered reasonable.

Should You Invest in LG Electronics IPO

LG Electronics India’s IPO presents an attractive opportunity for investors seeking exposure to India’s burgeoning consumer durables sector. The company’s strong brand equity, leadership in premium product categories, and focus on sustainability position it well for long-term growth. With a robust management team, clear strategic vision, and alignment with industry growth trends, LG Electronics India is poised to capitalize on India’s expanding consumer base.

However, potential investors should weigh risks such as market competition and raw material dependencies. Conducting due diligence on valuation metrics and comparing them with peers will provide further clarity on the investment’s attractiveness.