LG Electronics India Ltd. shares hit their lowest level since listing on Friday, trading 1.68% lower at ₹1,432.00 as the company's three-month shareholder lock-in period concluded. This marks a significant milestone for the recently listed consumer durables company, though the market reaction has been notably negative.

Lock-in Expiry Impact

The expiry of the lock-in period has made approximately 15.2 million shares eligible for trading, representing about 2% of the company's total outstanding equity. According to Nuvama Alternative and Quantitative Research, these shares carry substantial market value.

It is important to note that the end of the shareholder lock-in does not automatically imply that all these shares will be sold in the open market. The expiry simply makes them eligible for trading, giving shareholders the option to transact if they choose to do so.

Analyst Sentiment Remains Mixed

Despite the recent price decline, analyst coverage presents a mixed but generally positive outlook. Of the 18 analysts tracked by Bloomberg who cover this stock, 16 maintain a 'buy' rating, while only two have issued 'sell' recommendations.

However, LG Electronics India recently received its lowest price target since its market debut. On December 24, Avendus Spark initiated coverage with a 'Reduce' recommendation and established a price target of ₹1,536.00 per share.

The brokerage highlighted that while competition has intensified and customer bargaining power has declined, LG Electronics India's wide distribution network remains a significant strength and key competitive advantage.

Stock Performance Since Listing

The stock's performance since listing presents a mixed picture for investors. While LG Electronics India shares have demonstrated resilience with notable gains from the initial public offering price, recent trading has seen significant correction from peak levels.

Market Outlook

The conclusion of the lock-in period represents a significant event for LG Electronics India shareholders and potential investors. While the eligibility of additional shares for trading has created immediate downward pressure, leading to the stock hitting its lowest level since listing, the company's fundamental business strengths remain intact.

Market participants continue to monitor trading patterns and volumes as these previously restricted shares become available for transaction. The company's established market presence in the consumer durables sector and extensive distribution network continue to be viewed as key competitive advantages despite intensifying market competition.

LG Electronics India Limited has achieved a significant milestone in its tax compliance journey by concluding an Advance Pricing Agreement (APA) with the Central Board of Direct Taxes (CBDT) on January 5, 2026. The agreement, which covers a comprehensive 9-year period from April 1, 2014 to March 31, 2023, represents the culmination of a process that began with the company's APA application filed on March 29, 2018.

Financial Impact of APA Settlement

The conclusion of the APA brings substantial financial clarity to LG Electronics India Limited, with the most significant benefit being the elimination of contingent liabilities. The comprehensive resolution addresses long-standing transfer pricing uncertainties that had been weighing on the company's financial position.

APA Settlement Details

The APA resolution encompasses multiple aspects of the company's transfer pricing arrangements. The elimination of ₹172.00 crore in direct tax contingent liabilities removes a significant overhang that had been affecting the company's financial statements. Additionally, the resolution of ₹315.00 crore in contingency amounts related to royalty payments to LG Electronics Inc., Korea, the company's promoter, provides clarity on inter-company transactions.

Under the terms of the agreement, LG Electronics India Limited will be required to fulfill specific payment obligations. The company faces a net tax expense of ₹17.71 crore, excluding applicable interest that will be computed based on the actual payment date. Furthermore, the company must pay ₹3.86 crore to LG Electronics Inc. Korea pursuant to secondary adjustment provisions, ensuring compliance with India's transfer pricing laws.

Second Quarter Financial Performance

LG Electronics India reported challenging quarterly results alongside the APA announcement. The company's financial performance for the quarter ended September 2025 showed mixed signals in the consumer durables market.

The company's net profit declined 27.30% year-on-year to ₹389.00 crore, compared with ₹536.00 crore in the same period last year. However, revenue from operations showed resilience with a 1% year-on-year increase to ₹6,174.00 crore, reflecting stable consumer demand across its product portfolio despite challenging market conditions.

Strategic Significance and Market Performance

The successful conclusion of this APA represents a proactive approach to tax compliance and transfer pricing management. By resolving transfer pricing disputes covering nearly a decade of operations, the company has eliminated significant financial uncertainties while establishing a framework for future compliance.

Shares of LG Electronics India Limited ended at ₹1,467.00, down by ₹16.40, or 1.11%, reflecting investor sentiment amid the mixed quarterly results and APA settlement announcement. The agreement demonstrates the company's commitment to maintaining transparent and compliant transfer pricing practices in its operations within India's regulatory framework.