LG Electronics India Ltd, a wholly owned subsidiary of South Korea’s LG Electronics Inc., is gearing up for a landmark initial public offering (IPO) as it sharpens its domestic strategy and strengthens its role as a global export hub. The move marks a significant milestone in the company’s 28-year journey in India, reflecting its ambitions to cement leadership in the consumer durables sector while positioning the country at the center of its global supply chain.
IPO Structure and Market Positioning
The IPO, scheduled for 7–9 October, will see LG Electronics Inc. raise ₹11,607 crore by selling 101.8 million shares through an offer for sale (OFS), amounting to about 15% of its stake in the Indian arm. Since no new equity will be issued, proceeds will go to the parent company and not the subsidiary.
Sanjay Chitkara, Chief Sales Officer of LG Electronics India, framed the listing as more than just a financial event. He described it as an opportunity to narrate the company’s “India growth story” and showcase its preparation for the future through investments in technology, premium products, and expanded manufacturing capacity.
Expanding Manufacturing Footprint
LG Electronics India currently operates two major plants in Noida and Pune, which account for more than 85% of sales. A third manufacturing unit is under development in Sri City, Andhra Pradesh, with an investment of $600 million (₹5,001 crore). Slated to start operations by 2026, the facility will produce AC compressors, refrigerators, washing machines, and air conditioners.
The company is also doubling its overall capacity and scaling technology-driven manufacturing, aiming to meet growing domestic demand while preparing for a larger export push.
Export-Led Growth Strategy
Exports have become a crucial lever in LG India’s strategy. In FY25, exports touched $160 million, contributing 6% of revenues, with a 45% year-on-year growth. The product mix has expanded beyond single- and double-door refrigerators to premium categories like side-by-side refrigerators and OLED TVs, which cater to developed markets.
Atul Khanna, Chief Accounting Officer of LG India, emphasized India’s growing role in LG’s “Global South strategy,” highlighting how the country is being positioned as a global production hub. Premium manufacturing in India, executives explained, will not only help scale exports but also reduce fixed costs, making premium products more affordable for Indian consumers.
Premium Product Leadership
LG continues to dominate India’s home appliances and consumer durables market. Its leadership is particularly strong in premium categories—62% market share in OLED TVs and 44% in side-by-side refrigerators.
Premium products made up 17% of India’s home appliances market in FY25, a share expected to rise to 25–27% by FY26. LG’s ability to capture nearly double the industry average in premium categories highlights its competitive strength against rivals like Samsung, Haier, Daikin, and Voltas.
In FY25, LG India reported revenue of ₹24,366.64 crore (up 14% YoY) and profits of ₹2,203.35 crore (up 45% YoY), underscoring its financial strength.
Domestic Market Outlook
India’s consumer durables and electronics market, currently valued at $70 billion, is projected to expand to $100 billion by FY30 at a 7% CAGR, according to Deloitte. Penetration of appliances remains low compared to developed markets—just 4% of households own a microwave, 11% an air conditioner, and 21% a washing machine. This gap provides significant headroom for growth.
Recent government measures such as income tax reductions and GST cuts on big-ticket electronics from 28% to 18% are expected to further boost demand. Chitkara noted that affordability has improved significantly, driving record-breaking sales during festive seasons like Navratri.
Financial Resilience and Compliance
LG India remains a debt-free and cash-rich company, funding its new Andhra Pradesh facility entirely through internal accruals. Under Sebi’s revised guidelines, the company has five years to ensure 25% minimum public shareholding, providing flexibility in future fundraising.
Khanna indicated that LG would evaluate additional investments in line with market opportunities and regulatory requirements, though the immediate focus remains on execution and scaling operations.
The Road Ahead
With its upcoming IPO, LG Electronics India is not just offering shares—it is presenting its vision of India as both a domestic growth powerhouse and a global export hub. By combining premium product leadership, capacity expansion, export diversification, and consumer affordability, the company is positioning itself at the forefront of India’s evolving consumer durables market.
This listing could well become a defining moment in LG’s India journey, blending financial milestones with strategic growth imperatives.
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