LG Electronics India gets Sebi nod for Rs 15,000 crore IPO

LG Electronics India, a subsidiary of the South Korean conglomerate LG, has obtained approval from the Securities and Exchange Board of India (SEBI) for its Rs 15,000 crore Initial Public Offering (IPO). This development marks a significant step for LG Electronics India, making it the second South Korean company to enter the Indian stock market after Hyundai Motors India's debut in October last year. The company had initially filed preliminary documents with SEBI in December, proposing to offer over 10.18 crore shares, which account for a 15% stake in the company.

The public issue is structured entirely as an Offer for Sale (OFS), meaning that the proceeds from the IPO will be directed to the parent company based in South Korea, rather than being reinvested into the Indian unit. As the IPO does not directly benefit LG Electronics India in terms of capital influx, it highlights the strategic importance of bolstering the parent company's financial standing. This offering is expected to attract significant attention, especially with the company's substantial sales figures and market presence in India.

LG Electronics India has commenced roadshows to promote this IPO, highlighting its position as a prominent player in the consumer electronics and home appliances sectors within the country. The company offers a range of products, including washing machines, refrigerators, LED TV panels, inverter air conditioners, and microwaves, marketed to both B2C and B2B customers domestically and internationally. Manufacturing units located in Noida and Pune further reinforce its operational capabilities. In the previous financial year ending March 31, 2024, LG Electronics India reported a revenue of Rs 64,087.97 crore.

The IPO will be managed by a consortium of financial institutions, namely Morgan Stanley India, J P Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India. These firms will serve as the book-running lead managers, a role that underscores the confidence in the IPO's success given the company's performance metrics and market positioning. With a robust financial backing and strategic vision, LG Electronics India’s market entry through this IPO could potentially set a new benchmark for subsequent international offerings in the Indian market.

In the highly competitive consumer electronics market, LG Electronics India faces competition from several key players. Companies like Samsung and Sony continue to maintain substantial market shares, challenging LG’s market strategy and growth prospects. Samsung, with its diverse product range and significant R&D investments, remains a formidable competitor. Meanwhile, Sony continues to leverage its brand strength and technological innovations to capture a diverse consumer base. The outcome of LG's IPO could influence its competitive positioning and future strategic initiatives in the Indian market.

IPOs in 2024

In 2024, India's IPO market set a new record by raising $20.5 billion, making it the second-largest IPO market globally after the United States. This surpassed India's previous high of $16.1 billion in 2021. October 2024 was a particularly notable month, with a total of $5.2 billion raised, the highest ever for any single month in Indian history. The success was driven by blockbuster IPOs such as Hyundai Motor and Waaree Energies, with Hyundai's offering alone raising $3.8 billion – the largest IPO in India's history.