Ahead of IPO, LG India banks on domestic demand, premium portfolio and export hub ambition
LG Electronics Inc. LaWith the sale offer (Of) 101.8 million shares by selling 11,607 Crore. The first public offering planned to be held on October 7-9 will see that the South Korean parent company sells approximately 15% of its share in the Indian branch. Since a new equity will not be given, the subsidiary will not receive any funds from the proposal.
Sanjay Chitkara, a LG Electronics India Chief Sales Officer, said that the list is not just a “financial activity”, but the company’s opportunity to explain the “Indian growth story ve and prepare for the future. “This public offering is combined with other activities. We are currently operating two production units, one in Noida and the other in Pune. In addition, we invest 600 million dollars in a third facility and double our capacity. We want to increase access to premium products among the masses. Mint Wednesday.
LG Electronics India was founded on January 20, 1997 as a fully subsidiary of LG Electronics Inc. ITS Noida and Pune units have contributed to more than 85% of sales in the last financial years, according to IPO statements made by Axis Capital.
A third unit to produce AC compressors, refrigerators, washing machines and air conditioners is installed in Sri City, andhra Pradesh with an investment of 600 million dollars ( La5.001 Crore) For more than four years. Operations are expected to start until 2026.
Increasing exports
Andhra Pradesh is expected to increase exports, which have a key growth driving force for the company. Currently, exporting LG is about 6% of India’s business and largely includes mid -segment refrigerators and washing machines sent to markets in Asia, Africa and the Middle East. With the addition of premium production lines such as refrigerators and OLED TVs in the near future, LG expects to export to more markets and reach their scale economies.
LG Electronic India’s accounting officer Atiul Khanna, the demand for LG tools is growing worldwide and the company said, “He wants to position a global production pool”. “We are an integral part of the global southern strategy of our parents, which we want to establish India as a global production center,” he added.
“Exports from India produced 160 million dollars or roughly 6% of our income in 25 financial years, while we increased our exports by 45%. Recently we started to produce premium products such as refrigerator in India.
“The demand for premium products in developed countries is much higher. Starting to produce premium products [in India] In addition, especially for premium products, it will reduce the fixed cost load on these products and make scale economies for internal consumption, as it will make it more affordable for Indian consumers. “
Premium market leader
LG directs the Indian consumer strengths market on refrigerators, washing machines, air conditioners, microwave furnaces and televisions. Samsung, Haier, Daikin, Voltas and others compete. According to company managers, premium products are 17% of India’s home appliance market, which is expected to rise to 25-27% in 26 financial years.
The share of LG in the premium market is almost twice the average of the sector. For example, it has 62% of the LG OLED TV market and has a 44% market share in refrigerators side by side.
In FY25, the company’s income increased annually (14%) La24.366.64 Crore. He was standing in profit La2.203.35 Crore, 45% annually. LG portfolio contains televisions and monitors, refrigerators, washing machines, air conditioners, microwave furnaces, water purifiers, compressors and ceiling fans. The penetration of household appliances in India remains low-only 4% of the people’s people are microwave oven, 11% air conditioning and 21% is a washing machine, compared to 80-90% in advanced markets.
In the future donation collection plans, Khanna said, “Sebi (securities and stock exchange board) gives the leverage. Three years earlier but five years. We will follow all the Sebı guides. We will look at the right time and look at more investment and make more investments and make more investments when necessary, and a new company, a new company.
In accordance with Sebı’s reviewed instructions, LG Electronics India is five years to provide 25%minimum public shares.
Taurus on domestic demand
Meanwhile, the company is on the rise in domestic consumption. According to Deloitte, India’s consumer strengths and electronic market has a value of 70 billion dollars and a 7%compound annual growth rate (CAGR) is expected to expand to $ 100 billion in 30 fiscal years. According to FY27, India is expected to be the fourth largest market for consumer electronics of the world.
The market may receive a significant increase from the income tax deductions described in the budget and the last goods and service tax deductions in which the large ticket electronics tax is reduced from 28% to 18% and may cause manufacturers to reduce the prices of air conditioning, large television, monitors, projectors and dishwashers.
Chitkara said, “GST cuts will increase the supply of our products. We broke all the previous records in the first nine days of Navratri. GST cuts will help us shift consumers to premium products within their budgets.”
