LG Electronics India Secures SEBI Nod for Rs 15,000 Crore IPO
LG Electronics India, a subsidiary of South Korea’s LG Corporation, has received approval from the Securities and Exchange Board of India (SEBI) for its Rs 15,000 crore Initial Public Offering (IPO). This achievement makes LG the second South Korean firm to go public in the Indian stock market, after Hyundai Motors India listed in October 2023. The firm had submitted its draft red herring prospectus to SEBI in December with an offer of more than 10.18 crore shares representing a 15% stake.
The IPO will be a pure Offer for Sale (OFS), with the proceeds going to the parent company in South Korea and not being reinvested in the Indian subsidiary. This is reflective of LG's strategic objective of bolstering its global financial position while leveraging its already established brand presence in the Indian market. The issue is likely to receive robust investor interest considering the wide range of products available by LG India and its market leadership.
As a move to foster the IPO, LG Electronics India has organized roadshows, depicting its leadership position in consumer electronics and home appliance divisions. From the diverse products available in washing machines, refrigerators, LED TV panels, inverter air conditioners, to microwaves, serving the domestic as well as foreign B2C and B2B segments, the company serves. Based at two production bases located in Noida and Pune, LG Electronics India has entrenched its value creation and dissemination channels within the country. The firm registered a revenue of Rs 64,087.97 crore for the year ended March 31, 2024, demonstrating its strong market performance.
A group of financial institutions that include Morgan Stanley India, J P Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India will serve as the book-running lead managers for the IPO. Their participation underlines the faith in LG's market potential and the expected success of the offering.
Though it is a market leader, LG Electronics India has to work in an extremely competitive environment, with giants from around the world like Samsung and Sony presenting stiff competition. Samsung's vast array of products and massive investment in R&D is a huge challenge, and Sony's innovation quotient and customer loyalty continue to lure consumers in every segment. The result of LG's IPO may prove to be a decisive factor in determining its future strategies and further solidifying its competitive position in India's fast-paced electronics market.
With a robust financial backing, a large product portfolio, and calculated market maneuvers, LG Electronics India's IPO is set to create a new benchmark for foreign companies targeting the Indian market, possibly leading to increased global interest in the country's fast-expanding consumer electronics market.
