The distinction is placing. In September alone, international portfolio traders (FPIs) pulled out about $2.7 billion (virtually ₹24 trillion) from Indian equities. But, the identical traders poured ₹26,500 crore into anchor investments for IPOs, almost thrice greater than within the earlier 12 months.
The message is evident: traders at present see IPOs as a greater option to play India’s development story. Nicely-priced choices with robust fundamentals are attracting critical cash.
In accordance with EY’s World IPO Traits Report, the common return from Indian IPOs in 2024 was 37%, far greater than the 7% delivered by the broader market. It’s this sort of disconnect that LG Electronics India is banking on with its IPO. The corporate is coming to market with a ₹11,600-crore providing from 7–9 October, at a time when new listings are attracting outsized consideration.
However what does it imply for traders? Is LG Electronics India value including to your portfolio? On this listicle, we discover 5 compelling explanation why the IPO deserves a more in-depth look.
#1 Fridges to TVs: LG’s market management in numbers
LG Electronics maintains a powerful foothold in India’s equipment and client electronics market, with main positions in fridges, washing machines, and televisions.
It has among the many widest vary of merchandise (excluding cell phones) in each the business-to client and business-to-business segments. It additionally provides set up, restore, and upkeep companies that guarantee buyer stickiness.
In fridges, LG holds a gradual 29-30% market share, whereas in washing machines, it stays the undisputed chief with an over 33% share, pushed by its premium front-load and inverter fashions.
In panel televisions, the corporate accounts for almost 27-28% of the market, significantly in OLED and large-screen codecs the place competitors is comparatively restricted. Even within the crowded air-conditioner section, LG retains roughly 18%.
Nonetheless, the corporate has been dropping market share over the previous three years owing to intense competitors. Most notably, its share in air conditioners dropped from 19.8% in 2023 to 17% in 2025.
LG operates in a fast-evolving, price-sensitive market and faces challenges from Indian, Chinese language, and different international gamers reminiscent of Samsung, Whirlpool and Voltas. A continued lack of market share or aggressive competitor pricing may weigh on its enterprise.
Nonetheless, The corporate noticed early indicators of a rebound within the first half of 2025. Vitality-efficient, innovation-led product launches, significantly in inverter fashions and premium classes, helped LG regain floor.
#2 The ability of a worldwide model
Backed by its South Korean guardian, LG Electronics India advantages from the power of its globally recognised model. This model fairness, constructed over many years, enhances client belief and affords the corporate premium positioning in India’s aggressive client electronics market. It additionally supplies strategic benefits by way of international sourcing and operational assist. LG India procures key uncooked supplies and parts for its high-end product strains from the guardian, guaranteeing consistency in high quality and manufacturing requirements.
India stays an necessary development marketplace for the LG Group, contributing near 4% of LG Electronics Inc.’s international income.
#3 The innovation edge
Innovation has lengthy been a cornerstone of LG Electronics’ aggressive benefit. The corporate’s capacity to translate know-how into significant client experiences constitutes a moat that few rivals have managed to breach.
In India, almost three many years of operations have given LG a deep understanding of native wants, from energy-efficient home equipment suited to energy fluctuations to AI-enabled washing machines designed for Indian materials. This localisation of worldwide know-how, guided by client insights, has helped the corporate preserve relevance throughout market cycles.
In the meantime, partnerships with international know-how leaders reminiscent of Qualcomm and Google have allowed LG to remain on the forefront of sensible units. Its deal with sustainability, by way of energy-saving home equipment, recyclable supplies, and eco-friendly packaging, additionally appeals to the rising variety of environmentally acutely aware customers.
On the group stage, LG Electronics Korea continues to again innovation with scale. In 2024, the corporate invested a file 4.76 trillion received (about $3.3 billion) in analysis and improvement, an 11.2% improve over the earlier 12 months. R&D spending accounted for five.4% of complete income, underscoring the model’s long-term dedication to technology-led development.
The corporate additionally has 30 international analysis centres all over the world, together with in Sunnyvale, California, Chicago and Tokyo. These laboratories monitor the alterations in know-how and develop high-tech merchandise utilizing superior analysis and improvement.
The corporate has additionally opened a number of enterprise innovation facilities in India (it launched a fifth in Kolkata in 2024) to showcase rising applied sciences, collaborate with companions, and cocreate native options.
#4 Operational effectivity drives superior returns
Between FY23 and FY25, LG Electronics recorded constant development in each income and profitability on the again of regular enlargement in gross sales throughout its product segments.
Income from operations elevated at a compound annual development price (CAGR) of 10.9%, from ₹19,868 crore in FY23 to ₹24,367 crore in FY25, whereas web revenue clocked a 27.5% CAGR, suggesting enhancing operational effectivity and value management.
On the margin entrance, LG stands out for its effectivity. The corporate’s working margins strengthened from 9.5% in FY23 to 12.8% in FY25, leading to a three-year common of 10.9%. Web revenue margin additionally improved from 6.7% to eight.9%, averaging 7.6% over the interval.
Return ratios additional underscore this power. Over FY23-FY25, LG Electronics India reported a median return on capital employed (ROCE) of round 41% and a median return on web value (RONW) of almost 36%, each comfortably above business averages.
That stated, enter price volatility stays a key variable. Uncooked materials and traded items account for about 65-70% of working earnings, with 20-25% of inputs imported.
Costs of key commodities reminiscent of aluminium, copper, plastic and metal have remained unstable over the previous few years. Whereas LG India partially hedges its foreign exchange publicity, working margins stay prone to fluctuations in uncooked materials costs and trade charges.
Sustaining such excessive return ratios will rely upon LG’s capacity to stability price pressures with product premiumisation and preserve pricing self-discipline in a aggressive market.
#5 Capturing tomorrow’s market in the present day
India’s client electronics business is coming into a brand new development part, owing to structural tailwinds that transcend short-term consumption cycles. In accordance with Redseer, the sector is projected to develop at a ten% CAGR, to ₹7.22 trillion by 2029 on the again of rising disposable incomes, city way of life upgrades, and a shift towards premium, feature-rich merchandise and energy-efficient home equipment.
This shift is already evident available in the market. A rising variety of customers are transferring away from mass-market merchandise towards premium, technology-led ones. This, together with authorities initiatives reminiscent of manufacturing linked incentive schemes and the Make in India marketing campaign are accelerating native manufacturing, and giving built-in gamers reminiscent of LG a aggressive edge.
Premium merchandise are additionally gaining traction in client durables. Between 2019 and 2024, discretionary spending grew at a 7-8% CAGR, alongside rising common promoting costs and volumes, reflecting a transparent choice for aspirational merchandise. With incomes and concrete aspirations rising, the adoption of related, AI-enabled home equipment is about to develop additional.
To faucet this evolving demand, LG India is rolling out a variety of AI-enabled merchandise which are already common in developed markets. Additionally it is upgrading greater than 200 current choices, incorporating client suggestions and rising way of life tendencies to remain forward in a fast-changing market.
With main services in Noida and Pune collectively contributing over 85% of gross sales, and a ₹5,000-crore unit deliberate in Andhra Pradesh, the corporate’s Make in India push goes past mere compliance.
Warning: valuations depart little room for error
LG Electronics India’s shares at present commerce at a price-to-earnings (P/E) ratio of 51.2, barely under the business common of 57. The slight low cost possible displays latest market-share moderation, significantly in air conditioners, and a subdued efficiency within the June 2025 quarter, when income, working revenue, and web revenue declined 2%, 25%, and 24% year-on-year, respectively, owing to a muted summer season.
Even so, the inventory’s valuation stays wealthy by business requirements, suggesting that a lot of the corporate’s power has been priced in already. Its capacity to maintain such a excessive valuation will rely upon how rapidly development and margin momentum get well within the coming quarters.
Must you subscribe?
The LG Electronics IPO represents a possibility to achieve publicity to a extremely environment friendly, innovation-driven, and well-managed firm with a confirmed monitor file of innovation, operational effectivity, and capital self-discipline, working in a fast-growing sector.
Nonetheless, traders ought to word that the broader market stays unstable and the atmosphere unsure, with international headwinds and home earnings pressures making equities precarious. Traders ought to weigh the potential dangers fastidiously earlier than collaborating within the IPO.
Ayesha Shetty is a analysis analyst registered with the Securities and Change Board of India. She is an authorized Monetary Danger Supervisor (FRM) and is working towards the Chartered Monetary Analyst (CFA) designation.
Disclosure: The writer doesn’t maintain shares in any of the businesses mentioned. The views expressed are for informational functions solely and shouldn’t be thought of funding recommendation. Readers ought to conduct their very own analysis and seek the advice of a monetary skilled earlier than making funding choices.
