LG Electronics India secures SEBI approval for IPO – Key details inside

LG Electronics India has officially received the green light from the Securities and Exchange Board of India (SEBI) for its much-anticipated Initial Public Offering (IPO). The company initially filed its Draft Red Herring Prospectus (DRHP) with SEBI on December 6, 2024, and after thorough scrutiny, the regulatory body has now issued its final observation, allowing the company to move forward with the public offering.

IPO Structure: Offer for Sale (OFS) Model

The LG Electronics India IPO will be executed entirely through an Offer for Sale (OFS) by its parent company, LG Electronics Inc. Under this OFS structure, the South Korean multinational conglomerate will be offloading up to 10.18 crore equity shares.

• Face value per share: Rs 10

• No fresh issue of shares, meaning the proceeds from the IPO will not go to the company but rather to the parent company, LG Electronics Inc.

LG Electronics India: A Market Leader in Consumer Electronics

Founded in 1997, LG Electronics India has grown to become one of the leading players in the home appliances and consumer electronics sector. According to the Redseer Report, the company has maintained its dominance in offline sales by value for 13 consecutive years (2011–2023).

Key Product Segments

LG Electronics India has established a strong foothold across various product categories, including:

• Refrigerators

• Washing Machines

• Panel Televisions (TVs)

• Inverter Air Conditioners (ACs)

• Microwave Ovens

With nearly 80% of India’s consumer electronics market relying on offline retail (excluding mobile phones), LG’s widespread physical presence has been instrumental in maintaining its market leadership.

Financial Performance: Steady Growth and Strong Profits

LG Electronics India has demonstrated robust financial performance, surpassing many of its competitors, including Havells India, Voltas, Whirlpool of India, and Blue Star.

Annual Revenue and Profit Growth

• Fiscal Year 2024 Revenue: Rs 21,352 crore (up from Rs 19,868.24 crore in FY23)

• Profit After Tax (PAT): Rs 1,511.07 crore, reflecting a 12.35% growth from Rs 1,344.93 crore in FY23

Performance for Q1 FY25 (April – June 2024)

• Revenue: Rs 6,408.80 crore

• Profit After Tax: Rs 679.65 crore

This consistent growth underscores LG Electronics India’s strong financial standing and its ability to compete with established players in the Indian market.

Global Recognition and Market Reach

LG Electronics has been acknowledged as the world’s leading single-brand home appliances company by revenue in 2023, according to Redseer. The company operates in both B2C (Business-to-Consumer) and B2B (Business-to-Business) segments, offering installation, repair, and maintenance services for its wide range of products.

Expansive Distribution Network

With nearly three decades of presence in India, LG Electronics India has developed a comprehensive distribution network, ensuring accessibility across urban and rural markets.

• B2C Touchpoints: 36,401 retail outlets across India

• Service Network: 949 authorized service centers

• Vendor Network: 280 partners, many of whom have been with LG for over a decade

IPO Management and Lead Bookrunners

To ensure a smooth IPO process, LG Electronics India has partnered with some of the leading global investment banks and financial institutions. The IPO is being managed by:

• Morgan Stanley India

• JP Morgan India

• Axis Capital

• BofA Securities India

• Citigroup Global Markets India

Additionally, KFin Technologies has been appointed as the registrar for the IPO.

Conclusion: What This Means for Investors

With SEBI’s approval now in place, LG Electronics India is set to make its public market debut soon. Investors keen on India’s booming consumer electronics sector may find this IPO an attractive opportunity. LG’s strong market presence, financial growth, and established brand reputation make it a compelling addition to the Indian stock market.