What LG IPO has for investors and what it tells us about India’s electronic appliance industry.

The News

LG (Electronics India Ltd) has filed a draft IPO paper with the SEBI, making it the second South Korean company after Hyundai to go for a complete Offering For Sale (OFS) IPO.

The promoters (South Korean-based parent company—LG Electronics Inc.) would sell 15% equity shares of the company to raise about ₹15000 crores.

💡 An Offering for Sale (OFS) IPO is a process where existing shareholders, like promoters or investors, sell their shares to the public, and the proceeds go directly to these sellers, not the company.

India is LG’s second-largest market after the USA, where it leads in washing machines, refrigerators, and microwave ovens and ranks second in air conditioners and televisions. Being a market leader, it provides some interesting insights about the Indian electronics market. Let’s look at them.

India’s Electronics Appliance Market

Indian electronic appliances market has witnessed an annual growth rate of 7% over the last five years and is further expected to grow 12% annually in the next five years.

It is projected to reach ₹10 lakh crores by 2028 from the current ₹6.36 lakh crore, with B2C representing over 90% of the market.

Let’s look at the growth drivers.

The major growth driver of this trend is the rising GDP per capita and increasing disposable income.

India’s GDP per capita is expected to grow from ₹2.24 lakhs to ₹3.2 lakhs (~$3840), crossing the $3000 mark—a level often linked to faster growth in spending, especially on electrical goods.

Analysis of economies that previously crossed this benchmark, such as the United States, China, Japan, Russia, and Brazil, reveals that once per capita GDP surpasses the threshold, consumer demand for appliances and electronics typically surges.

How LG stand v/s its competitors?

In terms of revenue, LG is the second-largest household appliance and electronics company in India, after Samsung.

LG India’s revenue has grown at an average annual rate of 12.62% over the past two financial years, with a 7.5% increase in FY24 and an 18% rise in FY23.

The closest listed competitors of LG India are Voltas and Whirlpool. While Volas has a market cap of ₹58,385 crore and a P/E multiple of ~80, Whirlpool has a market cap of ₹24,404 crore and a P/E multiple of ~96.

💡 The P/E ratio (Price-to-Earnings ratio) shows how much investors are willing to pay for each ₹1 of a company’s earnings, helping assess if a stock is relatively overvalued or undervalued.

To Conclude

LG’s IPO reflects India’s thriving consumption story, driven by rising earnings and growing demand for premium appliances.

Whether LG’s IPO turns out to be a strong investment opportunity will depend on the pricing and other fundamentals, but one thing is clear—the sector is poised for significant growth.