LG Electronics India began preparing for an “Initial Public Offering” (IPO) in December 2024 with its “Draft Red Herring Prospectus” (DRHP) to SEBI. The offer for sale (OFS) aims to raise $1.8 billion (₹15,000 crore). This will be done by offering 15% company ownership. LG’s decision to capitalize on India’s growing consumer electronics and appliances market and position itself for growth in one of the world’s most promising economies is significant.
LG Electronics’ National Market Position
LG Electronics India is a major player in India’s home appliances and consumer electronics markets. The LG brand has a strong presence in India due to its wide range of products, including washing machines, refrigerators, air conditioners, televisions, and more. In FY 2024, the company reported ₹21,352 crore in revenue, ranking second in market share behind Samsung.
The company has led key product categories in volume for years. For thirteen years, it has led the offline value market share. Its deep integration into Indian households and well-established consumer base have kept it at the top of the home appliance market.
Initial Public Offering and Offer to Sell
LG Electronics India’s DRHP details the IPO. The company will offer up to 101.8 million equity shares, representing 15% of its stake in the Indian subsidiary. South Korean parent company LG Electronics will sell the shares. This offer for sale means the company will sell its shares rather than raise capital.
This move coincides with a time when India’s stock market is particularly appealing to investors from India and abroad, and more foreign companies are raising funds on the Indian capital market. Hyundai Motor India’s listing in 2024 was one of several high-profile IPOs in India, including a comparable offer for sale by the company’s parent company in South Korea.
Even though the initial public offering (IPO) occurs during global economic uncertainty, the Indian market offers significant growth opportunities, particularly in consumer goods and electronics. India’s growing middle class, urbanization, and disposable incomes are expected to drive consumer electronics growth of 12% annually over the next five years. Business is expected to benefit from this growth. LG can capitalize on these trends due to its strong brand and market presence.
Company Financial Strength and Growth Potential
The FY24 DRHP revenue of ₹21,352 crore offers valuable insight into LG’s financial health. However, it lags behind its competitive rival, Samsung India, with a revenue of ₹99,542 crore during the same period. LG remains the market leader in India for major home appliances and consumer electronics, except mobile phones. This market leadership is supported by the company’s long-term commitment to innovation and ability to meet customers’ diverse needs nationwide.
Due to rising demand for “smart home appliances,” rising middle class incomes, and increased technology use in urban and rural areas, the Indian home appliance market is expected to grow significantly. The DRHP also notes that the Indian market for home appliances and electronics has grown at 7% over the past five years and is expected to reach 12%.
Strategic IPO Fund Use
LG may use the IPO proceeds to boost its Indian competitiveness. The company is expanding its product line, modernizing its factories, and improving its distribution network. To stay ahead of market leaders Whirlpool, Voltas, and Haier, the company can invest in research and development.
LG Electronics India will gain financial flexibility by going public, allowing it to quickly respond to market opportunities and challenges. By increasing its visibility and credibility in India, the IPO could pave the way for future expansion.
Final remarks
LG Electronics India’s IPO marks a milestone in the company’s growth and commitment to India. The DRHP enables investors to capitalize on the rising demand for consumer electronics and appliances in India by facilitating the expected ₹15,000 crore IPO of the company. LG’s powerful brand, solid market presence, and promising growth prospects position it to continue its success in one of the world’s most dynamic markets.
Investors will closely monitor the stock’s performance during the IPO. This is especially true given India’s consumer sector’s growth potential.
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