LG Electronics IPO: 7 Key Points Before you Apply! 📺
The LG Electronics India Limited (LGEIL) IPO closes today, October 9, 2025, and it presents a rare opportunity in the mainboard space. Despite being a full Offer For Sale (OFS), the IPO is priced at a surprisingly attractive valuation, especially compared to its listed peers. My view is clear: The brand strength, market leadership, and expansion plans make this a high-quality cornerstone stock.
Final Verdict: The company has come out with its IPO at an attractive valuation, so I am subscribing to it for good listing gains and a long-term hold. ✍️
1. The Attractive Valuation Story (The Main Trigger)
The most compelling reason to apply is the pricing. LG Electronics is entering the market at a significant discount to its domestic peers. This makes the stock a relative value play, which is the primary driver for anticipating strong listing gains and future upside.
| Company | P/E Ratio (Post-IPO Upper Band) |
|---|---|
| LG Electronics | 37.69x |
| Havells | 66x |
| Voltas | 70x |
| BlueStar | 72x |
Trading at nearly half the valuation of industry leaders suggests significant room for re-rating post-listing, especially given its debt-free status and robust profitability.
2. Market Leadership & Brand Power
LG is a household name, and its dominance in key categories is hard to dispute. The company holds leadership or a top-tier position across almost all its product categories:
- Microwaves – 51% Market Share (Leader)
- Water Purifiers – 40% Market Share (Leader)
- Washing Machines – 33% Market Share
- Refrigerators – 30% Market Share
- TVs – 27% Market Share
This wide portfolio, combined with strong brand recall, ensures stable revenue generation and cross-selling opportunities across its 35,000+ consumer touchpoints.
3. Mega Expansion Plans for Global Hub Status
LGEIL is doubling down on its India operations to position the country as a global production hub. This mega plan includes:
- ₹5,000 Crore Investment: An investment of $600 million for new product lines and capacity expansion.
- Third Manufacturing Plant: A new plant is coming up at Sri City, Andhra Pradesh, expected to be operational by November 2026.
- Capacity Doubling: LGEIL plans to double its manufacturing capacity over the next five years, significantly boosting its existing units in Noida and Pune.
4. Financial Muscle: Debt-Free & High RoNW
The company's financial profile is exceptionally strong, showcasing efficiency and capital management:
- Debt-Free Status: The company reports NIL Borrowings, making it a debt-free entity.
- High Profitability: Profit for the year nearly doubled in three years, rising from ₹1,511 Cr in FY24 to ₹2,203 Cr in FY25.
- Excellent Returns: The Return on Net Worth (RoNW) stands at a healthy 37% for FY25, indicating high efficiency in utilizing shareholder equity.
- Backward Integration: The company manufactures key components like compressors and motors in-house, which gives it better control over cost, quality, and supply chain, improving profitability margins.
5. Key IPO Details and Financials
| Particulars | Details |
|---|---|
| IPO Open / Close | Oct 7 - 9, 2025 |
| Price Band | ₹1080 – ₹1140 |
| Lot Size | 13 shares (~₹14,820) |
| IPO Structure | Full Offer For Sale (OFS) |
| Registrar | Kfin Technologies Limited |
6. Key Risks and Weaknesses
Despite the positives, two major risks must be acknowledged:
- Full OFS: The entire IPO is a Full Offer For Sale. This means none of the ₹11,607 Cr proceeds will go to the company for expansion or working capital; they go entirely to the selling shareholders. This makes the stock a pure bet on the company’s current strength and future growth plans, which are funded through internal accruals.
- Contingent Liabilities: The company faces large outstanding litigations and contingent liabilities totaling ₹4,744 Crore (with ₹2,689 Cr as contingent liability). A major portion (around 80%) relates to Income Tax disputes. While this is common for large corporates, the magnitude is a financial risk that warrants careful monitoring.
- Trade Partner Dependency: Sales are concentrated, with the top 10 trade partners accounting for 31.25% of total sales, making the revenue flow sensitive to any disruption with these key partners.
7. Final Conclusion & Strategy
The LG Electronics India IPO is an exceptional high-quality company available at an attractive valuation. The strong brand, market leadership, debt-free balance sheet, and backward integration are overwhelming positives. The low P/E multiple relative to peers makes it an appealing investment for both listing gains and long-term holding, provided the market re-rates the stock towards the industry average.
My final verdict: Applying for both Listing Gains and a Long-Term Position. ✔️
SEO-Based FAQs
Q. Is LG Electronics IPO fully OFS?
A. Yes, the entire LG Electronics India IPO is a Full Offer For Sale (OFS), meaning the company will not receive any proceeds from the issue.
Q. What is the valuation of LG Electronics IPO compared to competitors?
A. The company is valued at a post-IPO P/E of 37.69x, which is significantly lower than its closest domestic competitors like Havells (66x) and Voltas (70x), making it attractively valued for long-term investors.
Q. What are LG Electronics India's major expansion plans?
A. The company plans to double its manufacturing capacity in five years, driven by a ₹5,000 Crore investment in a new manufacturing plant at Sri City, Andhra Pradesh, positioning India as a global production hub.
Q. When is the LG Electronics IPO expected to list?
A. The shares are tentatively scheduled to be listed on BSE and NSE on October 14, 2025.
Q. Is LG Electronics a debt-free company?
A. Yes, the company's financial statements show NIL Borrowings, confirming its debt-free status, which is a major positive for its balance sheet quality.