LG Electronics India IPO: Premiumisation Play in Appliances & Electronics – Should You Subscribe?

About the Issue:

LG Electronics India Limited (LGEIL), incorporated on January 20, 1997 and converted to a public company on December 03, 2024, designs, manufactures, imports and sells consumer electronics and home appliances across India. Its portfolio spans televisions/monitors, refrigerators, washing machines, room air-conditioners, microwave ovens, water purifiers, compressors and fans, supplemented by select imports from group entities. Operations are anchored by two manufacturing facilities (Noida/Greater Noida and Pune), nationwide distribution through branches, warehouses and wide retail touchpoints, and an extensive after-sales network. LGEIL serves both B2C and B2B (e.g., commercial displays) and highlights category leadership in multiple segments supported by continuous innovation (e.g., inverter ACs, connected/ThinQ offerings).

At a Glance

Objects of the Issue and Promoter Details

• Offer for Sale only: Rs 10,996.11 – Rs 11,607.01 crore.
• Company proceeds: Nil. This public issue is entirely OFS; the company will not receive any proceeds.

Industry Outlook 

India’s appliances & electronics TAM was Rs 3,24,500 crore in CY2024 and Rs 3,50,500 crore (annualised) in H1 CY2025. It is projected to reach Rs 6,19,000 crore by CY2029, implying about 14 per cent five-year CAGR (B2C + B2B; mobiles excluded). Within this, B2C TAM is expected to rise from Rs 2,73,500 crore in CY2024 to Rs 5,21,500 crore by CY2029 (about 14 per cent CAGR). Growth stems from premiumisation, energy-efficient products, deeper retail and e-commerce penetration, and improving household adoption from low bases. Globally, upgrades such as OLED, inverter and connected devices support replacement cycles and a richer value mix.

Financials (in Rs crores)

(a) Profit & Loss)

(Source – Company’s RHP)

(b) Balance Sheet Snapshot

(Source – Company’s RHP)

(c) Working Capital & Cash Flow

(Source – Company’s RHP)

Listed Peer Comparison 

(Data as of October 7, 2025)

SWOT Analysis

Strengths
• Category leadership across multiple product verticals; strong brand equity and recall.
• Integrated India manufacturing (Noida/Greater Noida, Pune), wide distribution and deep service network.
• Margin accretion with healthy operating cash generation and nil borrowings.

Weaknesses
• Exposure to consumer cycles and seasonality (notably RAC).
• Input-cost and FX sensitivity; broad SKU mix implies working-capital intensity.

Opportunities
• Large, fast-growing TAM with premiumisation and energy-efficient upgrade cycles.
• B2B adjacencies (HVAC, displays) and AMC/subscription revenue streams.
• Policy tailwinds for local manufacturing and component value addition.

Threats
• Intense competition from global and value-focused domestic/Chinese brands.
• Rapid technology cycles and evolving regulatory standards (energy labels).
• Macro/FX volatility affecting pricing power and demand.

Outlook & Valuation

LGEIL combines brand strength, manufacturing scale and cash-generative operations in a structurally expanding market. FY23–FY25 revenue rose from Rs 19,864.59 crore to Rs 24,366.64 crore (EBITDA up to Rs 3,110.12 crore), with margins improving from 9.53 per cent to 12.76 per cent and PAT at Rs 2,203.35 crore. Working capital needs are elevated (Receivables CAGR 16.34 per cent; Inventory CAGR 16.69 per cent) and operating cash flow was broadly flat (Rs 1,653.89 crore in FY25). On post-issue, fully diluted metrics, LGEIL screens at P/E 35.10x and EV/EBITDA 21.90x, which is materially below Havells (66.70x, 38.50x), Voltas (70.10x, 42.40x) and Blue Star (73.90x, 43.70x), and close to Whirlpool on EV/EBITDA (20.50x). Return ratios are strong (ROE 36.91 per cent; ROCE 56.80 per cent; ROA 24.50 per cent), with Debt/Equity 0.07 (borrowings nil). Net-net, valuations appear reasonable relative to peers given higher profitability and balance-sheet strength. Key monitors: input-cost/FX swings, competitive pricing, and continued discipline on receivables and inventory.

Recommendation: Subscribe (long term).
LGEIL is a category leader across key products; decades of execution, technology-led innovation and a deep understanding of Indian consumers drive brand loyalty and pricing power—factors that command valuations. Versus Havells/Voltas/Blue Star, the issue appears fairly valued given superior margins, returns and nil leverage. Allocate for steady compounding.