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Summary: Is LG India still worth betting on after its 50 per cent debut gain? Institutional investors saw something beyond the hype — fundamentals, cash flow strength and a front-row seat to India’s consumer boom. But with valuations now lofty and competition heating up, does the story still hold up?
LG India’s IPO attracted the second-highest subscription amount in India’s history at Rs 4.4 lakh crore against the offer of Rs 11,607 crore. That milestone was a result of institutional investors and high-net worth individuals (HNIs) queuing up in droves, signalling conviction in the fundamentals rather than chasing a listing-day thrill.
Retail investors, meanwhile, largely sat out with a puny subscription of 3.55 times. That pales in comparison with the qualified institutional buyers (QIB) category’s 166.51 times and the non-institutional investors (NII) category’s 22.45 times.
LG Electronics IPO collected Rs 40 for every Rs 1 demanded
| Company | Year | IPO size (Rs cr) | IPO Collections (Rs lakh cr) |
|---|---|---|---|
| Reliance Power | 2008 | 10,123 | 7.1 |
| LG Electronics India | 2025 | 11,607 | 4.4 |
| Bajaj HF | 2024 | 6,560 | 3.3 |
| Nykaa | 2021 | 5,350 | 2.4 |
| Waaree Energies | 2024 | 4,321 | 2.4 |
| Coal India | 2010 | 15,199 | 2.3 |
| Zomato | 2021 | 9,375 | 2.2 |
| Adani Ports | 2007 | 1,771 | 2.1 |
| SBI Cards | 2020 | 10,341 | 2 |
| Source: Business Line | |||
The low retail interest for a company of this stature and brand feels unusual at first when even small public offers are deriving mass retail subscriptions. But they likely had some valid reasons:
Retail caution in LG India was akin to Hyundai India’s IPO last year. Both were large OFS issues, with money going to selling shareholders rather than growth initiatives. Like Hyundai’s parent, LG Electronics—the global Korean parent of LG India—trades at much lower valuations overseas. These reasons likely tempered retail participation.
But after such a head-turning debut, is there still a reason to invest?
Is LG India still worth a look?
The blockbuster listing gains don’t broadly change the investment thesis that institutional players bet on. Here’s why:
- Solid fundamentals: Almost debt-free, consistently cash-generative, with ROCE among the best in consumer durables, LG India’s financials reflect sustainable strength. Even before listing, the company was clocking EBITDA margins near 10 per cent and profit after tax margins around 7 per cent, comfortably ahead of most consumer durable peers.
Fundamentals that command attention
The company has been able to deliver strong ROCE consistently
| Key ratios | 3Y average (%) | FY25 | FY24 | FY23 |
|---|---|---|---|---|
| ROE (%) | 37.8 | 45.2 | 37.2 | 30.9 |
| ROCE (%) | 42.7 | 51.8 | 42.2 | 34.2 |
| EBIT margin (%) | 9.3 | 11.2 | 8.7 | 8 |
| Debt-to-equity | 0.1 | 0.1 | 0.1 | 0.1 |
- Pricing at par with peers: LG now trades at a P/E of 52x, higher than the IPO multiple but in line with other industry peers. Moreover, consumer durables, as a category, is commanding a premium thanks to structural growth that inventors are anticipating to unfold over many years. The stock is certainly not cheap but also not out of line with its category.
- Sectoral tailwinds at its back: India’s electronics adoption is still in nascent stages with low penetration levels; ACs are only in 8 per cent of households, washing machines in 20–25 per cent and fridges in 35 per cent. Rising incomes, urbanisation, electrification and smart-technology adoption are expected to drive annual growth of 12–14 per cent and this could be faster in sub-categories like ACs and premium TVs. LG sits at the heart of this transformation, with leadership in high-growth segments, established manufacturing and deep distribution and service networks.
Standing at a pole position
LG Electronics holds a combined market share of around 25 per cent across all its segments
| Category/market share (%) | LG Electronics | C1 | C2 | C3 |
|---|---|---|---|---|
| Refrigerators | 29.9 | 23.5 | 15.6 | 11.5 |
| Washing Machines | 33.5 | 17.3 | 11.4 | 9.9 |
| Inverter Acs | 20.6 | 15.4 | 8.5 | 8.1 |
| Panel TVs | 27.5 | 23.2 | 17 | 6.2 |
| Source: RHP C1, C2, C3 are competitors that were not named in the RHP |
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Risks that still linger
Intensifying competition: LG has seen a gradual, albeit small, decline in market share across its segments over the last three years. This isn’t alarming yet, but it reflects the intensifying competition from both global brands like Samsung and Haier and domestic challengers like Voltas and Havells. The company’s ability to defend share while maintaining profitability will be crucial. With consumers becoming more brand-agnostic and value-conscious, execution will matter as much as brand equity.
Sector’s valuation premium: LG’s current multiple is comparable to peers but it still reflects low margin of safety. The entire sector is trading at a premium because of its high-growth narrative. Sustaining that premium will depend on LG’s ability to maintain its market leadership and margin profile even as competition heats up.
Consumer durables running hot
| Stocks | P/E |
|---|---|
| Whirlpool | 48 |
| Voltas | 71 |
| IFB Industries | 62 |
| LG Electronics | 52 |
| As of Oct 15, 2025 | |
Cyclical sensitivity: Consumer durables are inherently tied to income sentiment. A dip in discretionary income could affect demand. Any interest-rate shocks also risk delaying upgrades and premiumisation trends.
The bottom line
The LG India IPO was a landmark event for India’s primary market, a moment when institutional conviction met retail hesitation. Since listing, the stock’s performance has vindicated the former’s faith.
But with easy gains behind and expectations sky-high, execution takes centre stage. From here, the company must prove it can defend market share, preserve margins and ride India’s consumption upcycle without losing discipline. Lastly, its fundamentals justify staying interested and the price demands staying watchful.
Should you invest in the consumer durables theme?
Investing in India’s consumer growth story will require spotting quality businesses—with strong fundamentals, the strength to defend market share, sensible valuations and a proven ability to deliver consistent returns.
At Value Research Stock Advisor, we cut through the noise and identify such high-conviction ideas before the market catches on. Join us and find which stocks in the consumption theme make a part of our recommendations.
Also read: How Indian pharma is eyeing the weight-loss drug opportunity
This article was originally published on October 16, 2025.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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