LG Electronics IPO: Nuvama eyes capex plan, strong brand; SBI Sec sees superior returns

LG Electronics India, which is set to launch its mega-initial public offering (IPO) next week, has seen a thumbs up by brokerage firms so far. The company will be raising a little more than Rs 11,600 crore via its primary stake sale, selling its shares in the range of Rs 1080-1,140 apiece with a lot size of 13 equity shares and its multiples thereafter.

Nuvama Institutional Equities said that LG Electronics India, which holds market leadership across electronics, has announced $600 million capex for a third unit to expand capacity to cater to the domestic market as well as exports. The brokerage has not has not rated the issue, but noted it is valued at 35.6 times FY25 EPS at the upper range of the price band.

LG Electronics India, the Indian arm of LG Electronics, brings a 28-year legacy and leads in home appliances and consumer electronics by value market share in the offline channel. The company maintains leadership across washing machines, refrigerators, TVs, air conditioners, and microwaves. Its extensive network includes 35,640 B2C touchpoints and 463 B2B partners, with a robust aftersales presence, said Nuvama Institutional Equities.

Nuvama notes India's consumer durables sector is set for 8–10% CAGR growth through 2029, driven by young demographics, higher incomes, urbanisation, and digital progress. It has capitalised on these trends, operating the largest distribution network among peers and maintaining nearly half of its B2B partnerships for over a decade. Over FY19–25, it recorded a revenue/EBITDA/PAT CAGR of 8%/5%/6% and a median post-tax RoCE/RoIC of 34%/89%.

The IPO of LG Electronics India is entirely an offer-for-sale (OFS) of up to 10,18,15,859 equity share, by its South Korean parent LG Electronics Inc. The company is looking to raise a total of Rs 11,605 crore via IPO. LG Electronics Indi will not receive any proceeds from the issue. LG Electronics is set to become the third largest IPO of 2025.

LG Electronics India is one of the largest home appliance and consumer electronics in India, with market leadership across multiple product categories. Further, it has one of the largest in-house production capabilities among peers in India making it a giant in the industry, said SBI Securities.

"Its robust revenue, Ebitda and PAT CAGR of 10.8 per cent, 28 per cent and 27.8 per cent respectively during FY23-FY25 portrays its financial prowess. The issue is valued at P/E multiple of 35.1 times based on the post-issue capital. When comparing to its closest peers, the company outshines them in most valuation parameters with superior return profile," it added with a 'subscribe' tag.

Axis Capital, Morgan Stanley India Company, Citigroup Global Markets India, JP Morgan India and BofA Securities are the lead managers to the issue, while Kfin Technologies is the registrar for the issue. Shares of the company LG Electronics will be appointed on both BSE and NSE on October 14, Tuesday.