LG Electronics embarks on Indian unit's $1.8 bn IPO

It is poised to become South Korea's second IPO in India after Hyundai Motor India's listing in October

LG Electronics CEO Cho Joo-wan
LG Electronics CEO Cho Joo-wan
Chae-Yeon Kim 2
2024-12-09 11:40:27 why29@hankyung.com
IPOs

LG Electronics India Pvt., wholly owned by LG Electronics Inc., has embarked on the process of going public to raise up to 2.6 trillion won ($1.8 billion) as it strives to make India its key export hub through facility expansion and mergers and acquisitions.

The Indian unit filed a preliminary prospectus of its initial public offering, or a draft red herring prospectus (DRHP), with the Securities and Exchange Board of India on Dec. 6. It typically takes about three months to complete a review of an IPO application.

Once it gets the nod from the securities authority, the Indian unit is expected to list on the local bourse in the first half of 2025. Its parent company will float 15% of the subsidiary in addition to issuing new shares.

Investment banking sources expect the home appliance giant to raise up to $1.8 billion through the IPO at a valuation of about $13 billion.

LG Electronics India will earmark the proceeds for expanding production capacity and research capabilities. It also plans to use them on M&As, said LG officials.

It is building a third plant in India. It operates factories in Noida, 30 km southeast of India's capital city and Pune.

(Graphics by Dongbeom Yun)
(Graphics by Dongbeom Yun)

If it makes a trading debut in India, it will become the second South Korean company to float on the South Asian country's stock market. In October, Hyundai Motor India raised $3.3 billion in India’s largest IPO and the carmaker’s first offshore stock market listing.

The Indian unit posted a record-high half-year revenue of 2.09 trillion won in the first half of this year. That figure nearly matched the 2.2 trillion won in sales the Indian unit recorded for all of 2020.

Its net profit in the January-June period this year soared 27% to 198.0 billion won compared with the year prior.

(Graphics by Dongbeom Yun)
(Graphics by Dongbeom Yun)

LG is pinning its hopes on the world’s most populous country, where the home appliance penetration rate in 2023 for refrigerators, washing machines and air conditioners stood at 38%, 17% and 8%, respectively, far below that of China.

The increase in working women and nuclear families added to the rosy outlook for India’s home electronics market.

The Korea Trade-Investment Promotion Agency forecasts India’s home appliance market expanding to $21 billion in 2025 from $11 billion in 2018.

2024 model of LG's OLED evo TV (Courtesy of LG Electronics)
2024 model of LG's OLED evo TV (Courtesy of LG Electronics)


The flood of capital into the Indian stock market is expected to facilitate its offering.

Cho Joo-wan, chief executive of LG Electronics, said in a recent interview with Bloomberg that the company retains the top spot in India’s home appliance market and expressed optimism about its growth there.

He will stay on as CEO next year.

Write to Chae-Yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article.

LG Electronics unveils value-up plans, begins Indian arm IPO process

LG Electronics unveils value-up plans, begins Indian arm IPO process

Park Hyoung-sei, head of LG Electronics’ home entertainment division, speaks at the company’s webOS Summit 2024 in Incheon, South Korea, on Sept. 27, 2024 (Courtesy of LG) LG Electronics Inc., the world’s largest home appliances maker, on Tuesday announced plans to unlock valu

LG Group carries out modest management reshuffle

LG Group carries out modest management reshuffle

Cho Joo-wan took over as LG Electronics' CEO in December 2021 Cho Joo-wan will continue to lead LG Electronics Inc. as chief executive after its parent LG Group on Thursday carried out modest reshuffles in its annual management shake-up.Shin Hak-cheol will stay on as CEO of LG Chem Ltd., while

LG to expand appliance subscriptions to India to speed up leasing business

LG to expand appliance subscriptions to India to speed up leasing business

A customer checks out a refrigerator at an LG Electronics store in India (File photo by LG) LG Electronics Inc., the leading global home appliance maker, is considering expanding its subscription service into new overseas markets, such as India, the world’s most populous country, to accel

S.Korean retail investors rush to buy Indian stocks on dips

S.Korean retail investors rush to buy Indian stocks on dips

People read U.S. election news about President-elect Donald Trump at a roadside tea shop in Lucknow, India, on Nov. 7, 2024 (AP Photo via Yonhap) South Korea's mom-and-pop investors have upped their stake in Indian stocks, hoping that Donald Trump's return to the White House will boost the Sout

Indian stock market gears up for leap: NSE CEO  

Indian stock market gears up for leap: NSE CEO  

NSE CEO Ashish Chauhan speaks during an interview with The Korea Economic Daily in Mumbai on Oct. 22, 2024  India’s stock market is gearing up for a leap thanks to an influx of retail investors seeking better returns and the lower barriers for small companies to join the market, said

Hyundai Motor debuts on Indian bourses in its 1st offshore IPO

Hyundai Motor debuts on Indian bourses in its 1st offshore IPO

Hyundai Motor Group Chairman Chung Euisun (second from left) and Ashish Chauhan (second from right), CEO of National Stock Exchange (NSE), celebrate Hyundai Motor India's listing MUMBAI -- Hyundai Motor Co.'s Indian unit debuted on India's stock market on Tuesday as the South Korean carmaker be

Wealthy Koreans look to Indian equities as 'next China' investment

Wealthy Koreans look to Indian equities as 'next China' investment

The Indian stock market is emerging as Korean investors' favored investment destination First, it was the US that attracted many South Korean investors looking for higher returns.And then came China, which ensnared Korean retail investors with the dynamics of its economic power – the worl

South Korean investors bet big on ETFs tracking Indian equities

South Korean investors bet big on ETFs tracking Indian equities

(Courtesy of Getty Iimages)  India has emerged as a new darling for South Korean investors actively searching for an alternative to China reeling from multiple economic setbacks. According to Seoul-based financial data firm FnGuide Inc., nine exchange-traded funds (ETFs) tracking Indian se

India offers Korean firms detailed guidance for forays into India

India offers Korean firms detailed guidance for forays into India

The Financial Supervisory Service hosted an investment forum to guide Korean firms through India's financial regulations  India’s finance ministry, central bank and stock market operator outlined the country’s regulatory and investment environment for South Korean financial ser

(* comment hide *}