**LG Electronics India’s ₹11,600 Crore IPO Now Open: Should You Bid?**
*By Mudit Dube | October 7, 2025, 11:05 AM*
**IPO Overview**
LG Electronics India Ltd’s initial public offering (IPO) has opened for subscription today, with a three-day bidding window closing on October 9. The company has set a price band of ₹1,080 to ₹1,140 per share. This IPO is an offer for sale (OFS) only, comprising ₹11,600 crore worth of shares, representing a 15% stake divestment by its South Korean parent, LG Electronics Inc.
**Market Valuation**
At the upper end of the price band, the valuation of LG Electronics India stands at approximately ₹77,400 crore. Shares of LG Electronics India have been trading at a gray market premium (GMP) of ₹318, indicating a potential listing gain of around 28% above the upper price band.
**About LG Electronics India**
Founded in 1997, LG Electronics India is one of the country’s leading manufacturers and distributors of home appliances and consumer electronics. The company commands a strong presence in key categories such as washing machines, refrigerators, televisions, air conditioners, and microwaves.
LG operates two major manufacturing plants located in Noida and Pune, which collectively contribute about 85% of the company’s sales. With a robust retail network comprising over 35,000 touchpoints, LG India has maintained a significant footprint nationwide.
**Market Leadership and Innovation**
LG India has been at the forefront of innovation, being among the first to launch 4K and Smart TVs in India in 2011. The company further solidified its leadership by introducing OLED TVs in 2015.
Brokerages have praised the IPO for its attractive pricing, noting a price-to-earnings (P/E) ratio of 35x based on FY25 earnings, which represents about a 50% discount compared to its peers.
**Brokerage Recommendations**
Leading brokerages including Elara Capital and Choice Broking have recommended subscribing to LG Electronics India’s IPO. They highlight the company’s dominant market position, steady growth trajectory, and the potential upside from increasing consumer demand.
Anand Rathi has also expressed optimism, underscoring LG’s strong market share across critical product categories like washing machines, refrigerators, and televisions.
**Financial Performance and Growth Prospects**
From FY22 to FY25, LG Electronics India posted a healthy 13% compound annual growth rate (CAGR) in revenue, despite subdued consumer demand. This growth was largely driven by a 15% CAGR in the room air conditioner segment.
The company’s EBITDA margin stands at 12.8%, notably higher than peers like Havells, which report margins of 9-10%. Additionally, Elara Capital highlighted LG’s localization efforts, with localization rates increasing from 40% to 54% over the past five years, and expected to rise by 1-2% annually going forward.
**Risks and Challenges**
While the outlook appears positive, brokerages have cautioned investors about certain risks. One significant concern is a contingent liability of ₹315 crore related to a revised Advance Pricing Agreement (APA) with the parent company, which may require additional royalty payments.
Other challenges include risks stemming from weak consumer sentiment, potential supply chain disruptions, and intensifying competition in key categories such as air conditioners and smart TVs.
**Conclusion**
LG Electronics India’s IPO offers investors an opportunity to participate in one of India’s leading consumer electronics companies at an attractive valuation. While the company’s market leadership and steady financial performance are compelling positives, prospective investors should weigh the highlighted risks before bidding.
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*Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Please consult a financial advisor before making investment decisions.*
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