LG Electronics IPO: 10 Key Things To Know Before You Bid — Read Anand Rathi's Report

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Anand Rathi's IPO Report

Here are the 10 things to know before investing

1. LG Electronics India Ltd., a wholly owned subsidiary of LG Electronics Inc. of the Republic of Korea will launch its initial public offering on Oct. 7 and closes on Oct. 9.

2. The company has fixed the price band between Rs 1,080 to Rs 1,140 per equity share. The market value at the upper end of the price band is 77,800-crore.

3. The Rs 11,600-crore issue is an entirely offer-for-sale of 10.02 crore equity shares with a face value of 10 each.

4. Investors can place bids starting from a minimum of 13 shares and in multiples thereafter which means the minimum amount of investment required by a retail investor is Rs 14,820 based on the upper price band.

5. The shares of LG will list on the BSE and NSE on Oct. 14.

6. Morgan Stanley, J.P. Morgan, Axis Capital, BofA Securities, Citigroup Global Markets are the book-running lead managers for the public issue.

7. Strengths:

   Leading market share in the home appli ances 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.

8. Key Strategies:

   Build a strong foundation to capture long-term growth in India.

   Continue to be a brand of choice for every Indian household across volume and premium market categories.

   Diversify business models to create new consumer value.

9. Key Risk:

   Dependence on Promoter Group – Relationship and Royalty Payments: The Company is significantly dependent on its Promoter, LG Electronics, for various aspects of its business operations, including access to brand, technology, and technical know-how under the existing License Agreement. The company pays royalty to LG Electronics for the use of the “LG” brand and related intellectual property. Any adverse change in the relationship with LG Electronics or other entities within the LG Group including modification, termination, or non-renewal of the License Agreement could adversely affect the company’s brand equity, business operations, financial performance, and overall reputation.

   Regulatory Risk Related to Royalty Payments to Promoter: The Company’s royalty payments to its Promoter under the License Agreement are subject to regulatory and tax scrutiny. As of the date of the Red Herring Prospectus, the company has a contingent liability of Rs 3,153.00 million pertaining to such royalty payments. Any adverse observations or reassessments by tax authorities in respect of current or future periods could result in additional liabilities, penalties, or litigation, which may materially impact the company’s profitability and financial position.

   Conflict of Interest with Promoter and Related Parties: The Promoter and its subsidiaries may operate in similar business areas, potentially leading to conflicts of interest. Hi-M Solutek India Private Limited, an indirect subsidiary of the Promoter, provides services to the company without an exclusive arrangement. Additionally, certain Directors and senior personnel may have interests beyond their remuneration, which could influence decision-making.

   Dependence on Key Suppliers and Imported Raw Materials: The Company’s top 5 and top 10 suppliers accounted for 22.08% and 32.25% of total raw material purchases, respectively, in the 3 months ended June 30, 2025. Dependence on a limited supplier base and sourcing from select international markets exposes the company to risks arising from supply disruptions, geopolitical tensions, or supplier non-compliance, which could adversely affect production and business continuity.

   Intense Competition in the Home Appliances and Consumer Electronics Market: The Company operates in a highly competitive, price-sensitive, and rapidly evolving market, facing competition from established domestic players, foreign brands, and emerging online-first companies. Inability to effectively differentiate products, maintain pricing competitiveness, or adapt to changing consumer preferences could adversely affect market share, revenue growth, and overall operating performance.

10. Valuation:

LG Electronics India leadership in India’s home appliances and consumer electronics industry is driven by a combination of its strong brand equity, pioneering innovation, extensive distribution reach, robust manufacturing infrastructure, and long-standing supplier relationships all backed by the global strength and technological capabilities of LG Electronics Inc.

On the valuation front, based on annualized FY26 earnings, the company is seeking a P/E of 37.6 times, and a post-issue market capitalization of approximately Rs 7,73,801 million, making the issue appears to be reasonably priced.

Looking at strong legacy brand recognition with market leadership across multiple consumer durables products along with in-house production capacity among the peers in India making it giant in industry.

Hence, we assign “Subscribe” rating for the issue.

Click on the attachment to read the full IPO report:

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