LG Electronics India, a subsidiary of South Korea’s LG Electronics Inc., has received approval from the Securities and Exchange Board of India (SEBI) to launch its Initial Public Offering (IPO). After Hyundai Motor India’s IPO last year, it becomes the second South Korean company to enter the Indian stock market.
LG Electronics India Receives SEBI Approval for IPO
The IPO will be a complete Offer for Sale (OFS), meaning no fresh shares will be issued. The South Korean parent company, LG Electronics Inc., will sell around 10.18 crore shares, representing a 15% stake in its Indian unit. Since it is an OFS, LG Electronics India will not receive any funds from the IPO. The proceeds will go directly to the parent company.
#Business | SEBI gives green signal for LG Electronics India, Innovision IPOs but returns offer documents of Neilsoft
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While the exact issue size has not been disclosed, reports suggest that it could be valued at around ₹15,000 crore. If confirmed, it would be one of the biggest IPOs in the country.
Financial Performance
LG Electronics India has shown consistent financial growth. For the financial year 2023-24 (FY24), the company’s revenue rose by 7.48% to ₹21,352 crore, compared to ₹19,864.5 crore in the previous year. Additionally, the company reported a 12% increase in profit after tax (PAT), reaching ₹1,511 crore in FY24 from ₹1,348 crore in FY23.
Industry Leadership
The company has maintained its position as the market leader in the home appliances and consumer electronics segment in India for 13 consecutive years (2011-2023), according to a report by Redseer. LG Electronics India’s product lineup includes refrigerators, washing machines, air conditioners, televisions, and microwaves.
The company has a vast distribution network with 36,401 business-to-consumer (B2C) touchpoints across the country, ensuring strong market penetration. It also provides extensive after-sales support through 949 authorized service centers.
Book-Running Lead Managers and Registrar
The IPO will be managed by leading financial institutions, including:
- Morgan Stanley India
- JP Morgan India
- Axis Capital
- BofA Securities India
- Citigroup Global Markets India
- KFin Technologies Ltd will serve as the registrar for the issue.
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Opportunities and Risks
Strengths
- Market leadership in India’s home appliances and consumer electronics sector.
- Strong operational efficiency and local supply chain management.
- Extensive distribution and service network.
Risks
- Heavy dependence on the South Korean parent company for strategic decisions.
- Possible competition from the parent company or other global players.
- Reliance on a few key suppliers for raw materials.
Conclusion
As a result of its strong brand presence and consistent financial growth, LG Electronics India’s IPO has attracted significant attention in the market. As the company approaches its listing, investors will closely monitor the final issue size and pricing.
Watch this space for more updates on LG Electronics India’s IPO as it prepares to go public.
Disclaimer: This post is just for your information and shouldn’t be taken as investment. Before deciding what investments to make, investors should talk to financial experts.
