LG Electronics India IPO

About LG Electronics India IPO

The offer consists of an offer for sale component. The offer for sale portion includes up to 101,815,859 equity shares of face value of ₹ 10 each aggregating up to ₹ TBA crores. The total number of shares and aggregate amount are yet to be finalised.

The IPO opens on TBA and closes on TBA. The tentative listing is TBA. The initiation of refund will take place on TBA. The credit of shares to the demat account will take place on TBA. The allotment of bids will take place on TBA.

LG Electronics India Limited was incorporated in 1997 as a wholly owned subsidiary of LG Electronics, which is the leading single-brand global home appliances player in terms of market share by revenue in CY2023, according to the Redseer Report. The company sells products to B2C and B2B consumers in India and outside India. They also offer installation services, and repairs and maintenance services for all their products. They are present in two major segments: Home Appliances and Air Solutions, and Home Entertainment.

Objectives of LG Electronics India IPO

(i) To carry out the Offer for Sale of up to 101,815,859 equity shares of face value of ₹ 10 each by the Selling Shareholder aggregating up to ₹TBA crores.
(ii) Achieve the benefits of listing the Equity Shares on the Stock Exchanges.
(iii) Enhance their visibility and brand image and provide liquidity and a public market for the Equity Shares in India.

Industry Outlook

The Indian appliances and electronics market presents a compelling growth story. In India’s appliances and electronics market, competition unfolds across three major types of players: Domestic players, Chinese players, and global brands (including Korean players), each bringing distinct strengths and strategies that shape the competitive landscape. The Indian appliances and electronics market demands R&D investment, robust manufacturing, strong branding, extensive distribution, and customer-centric after-sales service. Leading firms maintain competitive edge by focusing on quality, brand trust, and product innovation. Chinese brands add complexity with competitive pricing and strategic online penetration, making it essential for players to adapt and compete effectively across price segments and sales channels.

The overall total addressable market (“TAM”) for the India appliances & electronics brands is estimated at ₹ ~323,000 crores in H1 2024 (Annualized) and is projected to reach ₹ ~569,000 crores by CY2028P, growing at a CAGR of ~15%. The TAM encompasses both B2C and B2B segments and excludes mobile phones. This reflects demand from households, commercial enterprises, and institutional buyers such as hospitals, hotels, and government bodies. This growth will be fuelled by the continued expansion of urban and rural markets, increased penetration of energy-efficient appliances, and the ongoing premiumization of consumer products.

The Home Appliances (HA) market in India is projected to grow steadily, driven by macroeconomic tailwinds and a growing preference for premium and energy-efficient products. The segment forms ~21% of the overall B2C appliances & electronics market in H1 2024 (Annualized) and is expected to reach ₹ ~207,000 crores by CY2028P, growing at a CAGR of ~14%. Key product categories, including refrigerators, washing machines, major kitchen appliances (including dishwashers, microwaves, water purifiers, chimneys, hobs, and built-in kitchens), air conditioners, and other small appliances (including water heaters, vacuum cleaners, air purifiers, and other minor appliances such as ironing and heating appliances) are witnessing significant demand uptake. With the organized sector accounting for ~60% of sales, the shift towards online and large-format retail channels is becoming more pronounced.

The Consumer Electronics (CE) market in India accounts for ~75% of the overall appliances & electronics market and is projected to reach ₹ ~662,000 crores by CY2028P, growing at a CAGR of ~10%. This segment encompasses key categories such as home entertainment (including TVs and audio), computers & peripherals (including monitors), personal care gadgets (such as shavers, trimmers, and hair styling gadgets), other personal devices (such as imaging devices, wearables, e-readers and portable players), and mobile phones. The market is witnessing significant demand, with the organized sector contributing ~60% of total sales. E-commerce and large-format retail channels continue to drive growth as they capture a greater share of the market.

The consumer/home/room air conditioner (RAC) segment is valued at ₹ ~32,000 crores in H1 2024 (Annualized) and is projected to grow at a CAGR of ~21%, reaching ₹ ~64000 crores by CY2028P. Inverter ACs dominate the market with a ~75% share, while fixed-frequency models account for ~25%. Share of window air conditioners has declined in India in the last 5 years. Window ACs now form ~10% and are expected to decline further. The RAC segment is expected to see a marked increase in penetration, forecasted to rise from ~12% in H1 2024 to ~18% in CY2028P. The market experiences seasonal fluctuations, with higher sales during summer months. Approximately 62% of the market is organized, with online channels and large-format retail contributing significantly to sales.

The home entertainment segment, encompassing televisions and audio devices, is currently valued at ₹ ~895 billion (US$ ~11 billion) in H1 2024 (Annualized) and is expected to grow at a CAGR of ~15%, reaching ₹ ~158000 crores by CY2028P. Televisions account for ~47% of this market, with audio devices (personal audio and home audio systems) making up the remaining ~53%.

The Indian government’s strategic initiatives are shaping a resilient and competitive landscape for the country’s appliance and electronics sector. Key policies focus on fostering local manufacturing, enhancing export capabilities, and promoting sustainable practices, positioning India as a prominent player on the global stage.

Company Information

The company was incorporated in 1997 as a wholly owned subsidiary of LG Electronics, which is the leading single-brand global home appliances player in terms of market share by revenue in CY2023, according to the Redseer Report. They have derived several benefits from their strong parentage including the “LG” brand which was listed on Interbrand’s Top 100 Best Global Brands in 2024. Their strong parentage, access to innovative technologies, and commitment to quality, positions them as a trusted brand in India.

LG Electronics India Limited is the market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume for the six-month period that ended on June 30, 2024, as per the Redseer Report. Additionally, they have been the number one player in this industry for 13 consecutive years (CY2011 to CY2023) as per the value market share in the offline channel in India, as noted in the Redseer Report. They are also market leaders in India across multiple product categories including washing machines, refrigerators, panel televisions, inverter air conditioners, and microwaves, based on the value market share in the offline channel (which is approximately 80% of the major home appliances and consumer electronics market (excluding mobile phones) in India in terms of value in the same period) for the six-month period that ended June 30, 2024, according to the Redseer Report.

Strengths of LG Electronics India IPO

• Leading market share in the home appliances and consumer electronics industry in India with #1 market share across key product categories.
  
• Introducing innovative technologies tailored to the needs of the Indian consumers.
  
• Shaping consumer experience with pan-India distribution and after-sales service network.
  
• Operational efficiency through strong manufacturing capabilities and localized supply chain.
  
• Parentage of LG Electronics, which is the leading single-brand global home appliances player in terms of market share by revenue in CY 2023 and a strong LG brand.
  
• Capital-efficient business with high growth and profitability.
  
• Diversified business model to create new consumer value.
  
• In house call centre in Noida and three outsourced call centres in Mumbai, Hyderabad, and Kolkata, each providing 24/7 consumer service.
  

Risks of LG Electronics India IPO

• Intensifying market competition: A broad range of competition from existing and new competitors, ranging from large multinational companies to highly specialized entities that focus on a limited number of products and services.
  
• Supply chain and input cost vulnerabilities: The market still relies on imported components, especially semiconductors and specialized materials critical for high-value appliances and electronics.
  
• Changes in price and availability of raw materials: The pricing and availability of raw materials are subject to competitive prices and can potentially be affected by global commodity prices, inflation.
  
• Regulatory and environmental compliance pressures: Stricter environmental regulations and consumer demand for sustainable and energy-efficient products present both opportunities and challenges.
  While the Government of India has announced and implemented several initiatives such as National Infrastructure Pipeline, Gati Shakti Scheme and National Logistics Policy to improve the transportation infrastructure in the country, improvement in such infrastructure will involve major capital expenditure and policy and administrative focus.
  
• Adapting to rapid technological advancements and consumer expectations.
  

Source: All the financial information for listed industry peers mentioned above is on a consolidated basis (unless otherwise available only on standalone basis) and is sourced from the annual reports / annual results as available of the respective company for the year ended March 31, 2024 submitted to stock exchanges.

*Financial information of the Company has been derived from the Restated Financial Information as at or for the year ended March 31, 2024.

#To be included in respect of our Company in the Prospectus based on the Offer Price.

Notes:

• Basic/Diluted EPS refers to the Basic/Diluted EPS sourced from the financial statements of the respective peer group companies for the year ended March 31, 2024.

• RoNW is computed as net profit after tax attributable to shareholders divided by total equity attributable to the equity shareholders as on March 31, 2024. Return on Net worth (%) is calculated as profit for the year divided by Net Worth at the end of the respective year / period.

• Net assets value per share = Net asset value per share is calculated by dividing net worth by weighted averagenumber of equity shares outstanding at the endof the period.

• P/E ratio for the peer group has been computed based on the closing marketprice of equity shares on BSE as on December 04, 2024, divided by the BasicEPS for theyear ended March 31, 2024.

• Market Capitalization = Total number of shares disclosed on BSE as of September 30, 2024 multiplied by the closing share price on BSE as on December 4, 2024.

Anchor Investor Bidding Date: TBA

Registrar: KFinTechnologies Limited

Book Running Lead Managers: Morgan Stanley India Company Private Limited, J.P. Morgan India Private Limited, Axis Capital Limited*, BofA SecuritiesIndia Limited, Citigroup Global Markets India Private Limited

*SEBI coordinator

Business Model

They operate their business through two main segments:

• Home Appliances and Air Solutions (B2B: Refrigerators, Washing Machines, Air Conditioners, Water Purifiers, Dishwashers, Microwave Ovens, Compressors and Motors, and B2B: System Air Conditioners)

• Home Entertainment: (B2C: Televisions and Audio Devices and B2B: Information Technologies (Monitor & Projector) & Information Displays)

Company Growth Trajectory

As of 31 March FY2024, the company’s Total Income was ₹21557.118 crores, compared to ₹20108.584 crores in FY2023. The company’s Profit After Tax was ₹1511.068 crores in FY2024 compared to ₹1344.930 crores in FY2023. Their EBITDA was ₹2224.873 crores in FY2024 compared to ₹1895.115 crores in FY2023.

Company Market Position

“LG” was named as the Most Trusted Brand in India by Trust Research Advisory for four consecutive years (2020-2023).

The company operates the largest distribution network among leading home appliances and consumer electronics players in India as of June 30, 2024, according to the Redseer Report. Their distribution network spans across urban and rural India through 36,401 B2C touch points for the three months that ended June 30, 2024.

As of 31 March 2024, the company’s Total Income, Profit After Tax, and EBITDA stood at ₹ 21557.118 crores, ₹1511.068 crores, and ₹2224.873 crores, respectively.

How To Check Allotment Status of LG Electornics IPO?

You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar — Kfin Technologies Limited. To check the status on the BSE website:

• Visit the BSE website
  
• Click on “Investor Services” and choose “Application Status Check”
  
• Choose the issue type — Equity or Debt (Equity in this case)
  
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is Kfin Technologies Limited
  
• Enter your application number or PAN number
  
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status
  

Follow these steps to know the allotment status on the registrar’s website:

• Visit the Kfin Technologies Limited website
  
• Choose “Public Issues” from the “Investor Services” drop-down
  
• Select LG Electronics from the drop-down
  
• Enter your PAN number or Application number
  
• Click on “Submit” to know the allotment status
  

How to Apply for LG Electronics India IPO?

To apply for LG Electronics India IPO:

• Step 1: Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
  
• Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for.
  
• Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
  
• Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds.
  
• Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.