IPO Note : LG Electronics India Ltd Geojit Financial Services Ltd
Creating Smarter Homes with Reliable Electronics
LG Electronics India Ltd (LGEIL), incorporated on January 20, 1997, as a wholly owned subsidiary of LG Electronics Inc., is a market leader in India across key product categories, including washing machines, refrigerators, panel TVs, inverter air conditioners, and microwaves. The company was the first to launch 4K and smart TVs in India and boasts one of the largest in-house production capacities among leading home appliance and consumer electronics player.
* The Indian appliances and electronics market grew from ~Rs.4,445 billion in CY19 to ~Rs.6,370 billion in CY24 and is projected to reach ~Rs.10,965 billion by CY29P, reflecting a CAGR of 11% over CY24–29P (Source: Redseer Research).
* LGEIL’s revenue, EBITDA, and PAT grew at CAGRs of 10.8%, 28%, and 27.8%, respectively, between FY23 and FY25, reaching Rs.24,367cr, Rs.3,110cr, and Rs.2,203cr, driven by product innovation and a robust distribution network.
* The company reported an EBITDA margin of 12.8% in FY25, up from 9.6% in FY23, while its PAT margin increased to 9% from 6.8% over the same period, driving a robust ROE of 36.9%.
* LGEIL reported a debt-to-equity ratio of 0.1x in FY25, with a ROCE of 42.2%, the highest among leading home appliance and consumer electronics players.
* As of FY25, LGEIL’s manufacturing facilities in Noida and Pune have a combined installed production capacity of ~1.45 crore units. The company is investing Rs.5,001cr to establish a third plant in Andhra Pradesh, aimed at further expanding its production capacity.
* At the upper price band of Rs.1,140, LGEIL trades at an FY25 P/E of 35x, which appears reasonable relative to its peers. LGEIL's strong brand equity, technological capabilities, and robust governance position it well for future growth. The company’s new capacity expansion, strong ROE, and better margin profile make it financially strong, efficient, and ready for long -term success. Accordingly, we assign a SUBSCRIBE rating for investors with a medium- to long-term investment horizon.
Purpose of IPO
The issue is primarily an Offer for Sale (OFS) of up to 10,18,15,859 equity shares totalling Rs.11,607cr. The objective of the issue is to achieve the benefits of listing the equity shares on the stock exchanges.
Key Risks
* The nature of business is seasonal and varies with consumers' spending power and disposable income.
* Increases in the prices of raw materials could adversely affect business
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