With plans to list its Indian arm, LG Electronics India, South Korean consumer durables major LG Electronics Inc on Friday filed a draft red herring prospectus with market regulator SEBI for an IPO go ahead for a public listing at the Indian bourses. The issue, which is completely offer for sale, will see promoter, LG Electronics Inc, offloading up to 10.18 crore shares of face value of ₹10 each to be issued through a book building route. The IPO will constitute 15 per cent stake sale for the controlling parent in the Indian unit.
This comes close on the heels of South Korean automobile maker Hyundai India getting listed in India. If LG Electronics India gets listed, it will be the second South Korean Chaebols to tap Indian bourses at a time when the country’s IPO market is booming. In October, Hyundai Motors Company listed its local unit, Hyundai Motor India through India’s biggest-ever IPO raising $3.3 billion (₹27,856 crore) via OFS route.
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In its draft prospectus, the consumer appliance and electronics major said that the public listing will enhance its visibility, brand image, provide liquidity and a public market for the equity shares in the country.
Since its a complete OFS, LG Electronics India will not receive any proceeds and the IPO mop up will go to the South Korean parent. The merchant bankers for the issue are Morgan Stanley India Company, JP Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India.
Wide portfolio
LG Electronics India is a leading player in major home appliances and consumer electronics and offers a wide portfolio including washing machines, air-conditioners, refrigerators, panel televisions, microwaves and dishwashers among others. It said that it has been a market leader in home appliances and consumer electronics category, except mobile phones, in terms of volume for the six-month period ended June 30,2024 as per a Redseer Report, it noted in the draft prospectus. The South Korean appliance major set up the Indian subsidiary in 1997.
The Indian arm of the South Korean appliance major, posted revenue from operations at ₹21,352 crore in FY24 up 7.47 per cent. Net profit for the fiscal under review stood at ₹1,511 crore up about 12 per cent over the previous fiscal.
Currently, it operates two manufacturing facilities in Noida and Pune. “In FY24, we had an installed capacity of 13,990,000 products at our Noida and Pune manufacturing units collectively,” it noted. The company is also setting up a third manufacturing plant in Andhra Pradesh with an investment of ₹5,000 crore. “In addition to manufacturing products, we also manufacture several key components, such as compressors and motors,” the company said in its DRHP.