South Korean tech giant LG Electronics is making a decisive long-term investment in India, unveiling plans for a Rs. 5,000-crore manufacturing facility in Andhra Pradesh. The new plant, its third in India, is a key component of LG’s broader strategy to bolster domestic production, localize supply chains, and cater to India’s booming consumer market. Alongside this industrial expansion, LG has also filed for a Rs. 15,000-crore IPO of its Indian subsidiary, marking a dual-pronged push to anchor operations and tap capital market growth amid shifting global dynamics.
Massive Manufacturing Expansion in Andhra Pradesh
LG Electronics has officially broken ground on its largest electronics investment in South India to date—a Rs. 5,000-crore facility in Sri City, Andhra Pradesh. Spanning 1 million square meters, the site is scheduled for completion by the end of 2026 and will manufacture a wide range of consumer durables including:
- 800,000 refrigerators
- 850,000 washing machines
- 1.5 million air conditioners
- 2 million air conditioner compressors annually
The new unit marks LG's third manufacturing plant in India, complementing existing facilities in Noida and Pune. Once operational, this expansion will bring the company's total Indian output capacity to 2 million televisions, 3.6 million refrigerators, 3.75 million washing machines, and 4.7 million air conditioners annually.
The project is the first large-scale manufacturing complex to break ground under Andhra Pradesh’s new electronics manufacturing policy and is expected to generate approximately 1,900 direct and indirect jobs.
Strategic Goals: Local Supply Chains and Export Potential
More than a factory, LG’s new facility is a signal of confidence in India’s potential as a manufacturing and export hub. The plant aims not only to meet rising domestic demand driven by a growing middle class but also to serve key regional export markets including Bangladesh and countries in the Middle East.
India currently has a household penetration rate of just 30% for washing machines and a mere 10% for air conditioners—figures that underscore the enormous headroom for growth. By producing high-end models tailored to local preferences, such as convertible refrigerators for vegetarian households and saree-cycle washing machines, LG is clearly aligning its product innovation with Indian consumer behavior.
Additionally, four LG suppliers are entering the Indian market for the first time, committing Rs. 839 crore in investments within the same industrial corridor—setting the stage for an emerging white goods manufacturing ecosystem in Andhra Pradesh.
Rs. 15,000-Crore IPO: Tapping India’s Capital Market
While building physical infrastructure, LG is also preparing for a financial leap forward. In December 2024, LG Electronics India filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for a landmark initial public offering (IPO) valued at approximately Rs. 15,000 crore.
The proposed IPO is a pure offer-for-sale (OFS), with parent company LG Electronics Inc set to offload 10.18 crore equity shares—equivalent to a 15% stake. As there is no fresh issue component, all proceeds from the IPO will go to the South Korean parent, not the Indian subsidiary.
The listing plan, initially expected to unfold in May 2025, has been delayed due to global market turbulence, particularly tariff-related uncertainties originating from the United States.
Strong Financial Footing and Future Outlook
LG Electronics India remains a formidable player in the consumer electronics and home appliance segment. The subsidiary reported revenue from operations of Rs. 64,087.97 crore for the financial year ending March 31, 2024. Its dual approach—deepening manufacturing roots and entering public markets—underscores a sophisticated, long-term growth vision tailored to the Indian landscape.
The plant in Sri City, supported by strategic capital market initiatives, positions LG to dominate the next wave of consumer demand in India and beyond. Amid shifting geopolitical dynamics and a rethinking of global supply chains, LG’s India bet is not just bold—it’s calibrated for the future.
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