Management

• Hong Ju Jeon (Managing Director)
• Daehyun Song (Chairman and Non-executive Director)
• Promila Bhardwaj (Independent Director)
• Ramesh Ramachandran Nair (Independent Director)
• Santosh Kumar Mohanty (Independent Director)
• Sanjay Chitkara (Chief Sales Officer)
• Ashish Agrawal (Chief Operating Officer)
• Atul Khanna (Chief Accounting Officer)
• Gagan Jeet Singh (Chief Manufacturing Officer)
• Anuj Goyal (Company Secretary and Compliance Officer)
• Dongmyung Seo (Whole-time Director and Chief Financial Officer)

Use of Proceeds

The total issue size is Rs. 11,607 cr, which comprises entirely of offer for sale (Rs.11,607cr). The company will not receive any proceeds from the offer.

Competitive Strengths

Market Leadership and Diverse Product Portfolio The company’s foremost strength lies in its consistent market leadership in India’s home appliances and consumer electronics industry, holding the #1 position across key categories such as washing machines, refrigerators, panel televisions, inverter air conditioners, and microwaves. This leadership, maintained across CY2022–CY2024 and H1CY2025, highlights its strong consumer connect and ability to anticipate evolving preferences. The company’s product range is also among the broadest, spanning advanced technologies like OLED, QNED, NanoCell, UHD, and LED televisions, as well as mass-market and premium appliances. By balancing affordability with innovation and premium features, it successfully caters to both value-driven and aspirational consumers, reinforcing its competitive edge and sustaining long-term demand.

Innovation and Consumer-Centric Customization A key strength of the company lies in its ability to consistently pioneer innovative technologies while tailoring them to the unique needs of Indian consumers. With 28 years of local experience and the backing of LG Electronics’ global R&D leadership, the company has introduced several industry-firsts such as OLED televisions, 4K and Smart TVs, and 100% inverter air conditioners. Its first-mover advantage in OLED TVs has secured it over 60% offline market share in this premium segment. Beyond technology, it customizes appliances to suit Indian lifestyles—microwaves with Indian dish presets, washer dryers designed for monsoons, rat-mats in washing machines, and floral refrigerator finishes. This dual focus on innovation and localization enhances consumer trust and reinforces market leadership.

Extensive Distribution and After-Sales Service Network The company’s strength lies in its unmatched pan-India distribution and service infrastructure, which ensures deep consumer reach and consistent brand experience. With 35,640 B2C touch points, including LG BrandShops, modern trade outlets, traditional stores, and online platforms, the company provides consumers with both physical and digital engagement opportunities. Nearly half of its trade partners have been associated for over a decade, reflecting strong, long-term relationships. Complementing this is one of India’s largest after-sales networks, with 1,006 service centers, 13,368 engineers, and four call centers offering same-day installations and reliable maintenance support. This integrated ecosystem not only enhances customer satisfaction and loyalty but also enables tailored regional strategies and cross-selling opportunities, reinforcing its market leadership.

Strong Parentage and Trusted LG Brand A significant strength of the company is its association with LG Electronics, the world’s leading single-brand home appliances player by revenue in CY2024. The globally recognized LG brand carries strong consumer trust and loyalty in India, consistently reinforcing the company’s leadership. Awards such as “Most Trusted Brand – Electronics Segment 2025” and “India’s No.1 Refrigerator Brand” validate its credibility. With over six million social media followers, the brand enjoys strong digital engagement as well. Beyond reputation, the LG ecosystem provides access to global R&D, product innovations, advanced manufacturing practices, and sustainability initiatives. This parentage enables the company to swiftly launch new, locally relevant product variants while maintaining international quality standards, strengthening its long-term competitive edge.

Peer Comparison

Key Risks & Concerns

Dependence on LG Electronics and Royalty Obligations A key risk for the company is its heavy reliance on LG Electronics, its 100% owner and promoter, for brand usage, product innovations, patents, technical know-how, and exports. Under the perpetual License Agreement, the company pays royalties of ~1.9% of revenues, with potential for future increases up to 5% without shareholder approval. Any termination or adverse change in this relationship could restrict brand and technology access, materially impacting operations, financial performance, and overall reputation.

Raw Material Price Volatility and Supply Risks The company is highly exposed to fluctuations in raw material prices, with purchases accounting for over 74% of revenues in Q1 FY25. Key inputs such as steel, copper, aluminum, polymers, and semiconductors are subject to global commodity cycles, inflation, geopolitical tensions, trade policies, and currency movements. Any supply shortages, withdrawal of trade concessions, or sharp price increases could elevate costs, disrupt production, and compress margins. Limited ability to fully pass these costs to consumers heightens operational and financial risks.

Supplier Concentration and Geopolitical Exposure The company faces risks from supplier concentration, with its top 10 suppliers accounting for over 32% of raw material purchases and reliance on limited vendors for critical inputs like steel, resins, and internally grooved tubes. Dependence on overseas suppliers, particularly from China, Korea, Singapore, and Thailand, exposes it to geopolitical tensions, tariffs, currency fluctuations, and supply chain disruptions. Any failure by key suppliers to deliver timely and quality materials could disrupt production, raise costs, and adversely affect operations and profitability.

Revenue Concentration in Core Product Categories The company is highly dependent on its Home Appliances and Air Solution division, which contributed 78.4% of revenue in Q1 FY25, with refrigerators, washing machines, air conditioners, and televisions together accounting for over 90% of sales. Any slowdown in demand, shifts in consumer preferences, rising competition, or technological disruption in these categories could materially impact growth. Given the concentration, inability to timely diversify or adapt to evolving trends poses a significant risk to revenue stability and profitability.

Outlook and Valuation

The company is strongly positioned to capitalize on India’s expanding home appliances and consumer electronics market, which is projected to grow at a 14% CAGR from Rs. 6.9 trillion in H1CY2025 (annualized) to nearly Rs.11 trillion by CY2029. Rising urbanization, growing middle-class aspirations, and increasing demand for premium, technology-enabled appliances create a favorable demand environment. With highest market share across washing machines, refrigerators, air conditioners, and televisions, as well as one of the widest product portfolios in the industry, the company is well placed to address evolving consumer preferences. Its balanced product strategy—providing affordable, durable models for the volume market alongside AI-enabled, sleek appliances for the premium segment—ensures it remains relevant across income groups.

To support growth, the company is investing Rs.50.01 billion in a third manufacturing unit in Andhra Pradesh, expected to be operational by FY2027, with a phased rollout starting with air conditioners and compressors. Alongside automation upgrades at existing plants and a focus on higher localization of raw materials (54.1% in Q1 FY26), the company is improving manufacturing flexibility, efficiency, and cost competitiveness. Expansion of its pan-India distribution network—including LG BrandShops, modern trade outlets, quick commerce, and D2C channels—will deepen consumer access while strengthening brand engagement. Product diversification into built-in kitchens and customized solutions tailored to Indian households further enhances growth prospects, as does leveraging LG ThinQ technology to integrate AI and energy-efficient features into premium offerings.

Diversification beyond B2C into B2B markets presents an additional growth lever. With the Indian B2B electronics and appliances market forecast to reach Rs.970 billion by CY2029, the company is targeting high-value opportunities across HVAC systems, LED displays, commercial washing machines, and smart information solutions for sectors like healthcare, education, and real estate. Moreover, its expansion into AMCs and subscription-based programs such as “Careship” will generate recurring revenues, enhance customer stickiness, and provide stable cash flows. Backed by LG Electronics’ global innovation, brand equity, and operational excellence, extensive distribution reach, the company is well placed to sustain its leadership and capture multi-year growth opportunities in India’s fast-evolving consumer electronics landscape. LG Electronics India is valued at 35x based on FY25 EPS, calculated based on the upper price band. LG Electronics valuation appears reasonable. We recommend a SUBSCRIBE rating for long-term investors.