LG Electronics India has filed its DRHP with SEBI for a ₹15,000 crore IPO, India’s fifth-largest to date. Structured as an offer for sale, it will offload a 15% stake. LG, a market leader in consumer electronics, aims to leverage India’s expanding appliances market, projected to grow 12% annually.
In a significant development for the Indian capital markets, LG Electronics India, a subsidiary of the South Korean electronics giant, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹15,000 crore through an initial public offering (IPO). This IPO, structured as an offer for sale, is set to offload 101.8 million equity shares, representing a 15% stake in the company.
This marks the fifth-largest IPO in India’s history, just behind Coal India’s ₹15,200 crore offering in 2010. The announcement comes on the heels of Hyundai Motor India’s (HMI) ₹27,870-crore IPO in October, the largest in India, which garnered a lukewarm 2.4x subscription and has since seen its shares trade 4% below the issue price. Similar to HMI’s offering, LG Electronics India’s IPO is entirely an offer for sale by the Seoul-based parent company.
Read more: Why Korean Giants Are Eyeing India for IPOs?
LG Electronics India: Market Leader in Home Appliances
LG Electronics India has been a dominant player in the Indian home appliances and consumer electronics sector for over a decade. According to the company’s DRHP, it has maintained its position as the market leader in major appliances and electronics (excluding mobile phones) in terms of volume for 13 consecutive years from 2011 to 2023.
The company competes with global giants such as Samsung, Haier, Whirlpool, and Sony, as well as Indian players like Voltas, Havells, Godrej, and Blue Star. Despite the stiff competition, LG Electronics India is second only to Samsung India Electronics in revenue. For FY24, LG Electronics reported revenue of ₹21,352 crore, compared to Samsung’s ₹99,541.6 crore. Havells India and Godrej & Boyce occupy the third and fourth spots, respectively, in this sector.
In the DRHP, LG Electronics highlighted its leadership in offline channels, where it has consistently maintained the highest market share by value. This achievement aligns with India’s growing appetite for home appliances and consumer electronics, a market that has expanded at 7% annually over the past five years. This growth rate is projected to accelerate to 12% in the coming years, driven by rising disposable incomes, increasing urbanization, and higher penetration of appliances across urban and rural areas.
Also Read: Hyundai Motor India IPO: Key Insights for Investors
IPO Dynamics and Industry Context
The LG Electronics India IPO is expected to play a pivotal role in the company’s journey while offering investors a slice of India’s thriving consumer electronics market. The IPO will be managed by Morgan Stanley India, JP Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India.
This offering also underscores a larger trend of South Korean companies leveraging India’s robust capital markets. Hyundai Motor India’s IPO, though historically significant in size, received mixed investor reception, likely due to market conditions and concerns over valuation.
LG Electronics India’s IPO comes at a time of political turmoil in South Korea, with emergency martial law declared and then rescinded by President Yoon Suk Seol. This backdrop may affect market sentiment, especially for foreign investors weighing geopolitical risks.
Also Read: South Korea Declares Martial Law: Impacts on Economy and Markets
Challenges and Opportunities
While LG Electronics India is a market leader, it operates in a fiercely competitive industry where consumer preferences and technological advancements rapidly evolve. Maintaining its leadership in terms of value and volume requires continuous innovation, operational efficiency, and a strong distribution network.
Moreover, the market’s response to LG Electronics India’s IPO will depend on how effectively it communicates its growth potential. With India’s appliances and electronics market expected to grow at 12% annually over the next five years, LG’s positioning as a trusted brand and its long-standing presence give it a strategic advantage.
How Did Hyundai IPO Perform?
Hyundai Motor India’s IPO, the largest in India’s history at ₹27,870 crore, has struggled since its listing. Shares are currently trading at ₹1,889.20, 4% below the IPO price of ₹1,960. The company reported a 16% drop in net profit for the September quarter to ₹1,375 crore and an 8% revenue decline to ₹17,260 crore. EBITDA fell 10% to ₹2,205 crore, with margins narrowing by 30 basis points to 12.8%.