LG Electronics delays India IPO amid high market volatility

South Korea's LG Electronics has put a hold on the initial public offering (IPO) of its Indian arm, amid the ongoing volatility in the equity markets. The company has communicated to its advisors that the public issue might be postponed, with a potential resumption dependent on improved market conditions, according to a Bloomberg report. As of now, the decision remains tentative, and "it is still under consideration and no final decision has been made". The IPO process continues, yet "the company cannot comment on the timing", according to an LG Electronics official in Seoul.

The valuation of LG India is under pressure, potentially dropping from $11.5 billion to $10.5 billion due to the downturn in local equity markets. Initially expected to be launched in May, the IPO was anticipated to make a significant impact on Dalal Street. Earlier this year, LG Electronics had already organised investor roadshows to garner interest in the offering. The company received approval from the Securities and Exchange Board of India (Sebi) in March, following the filing of preliminary papers in December 2024. LG aims to raise approximately $15 billion through the IPO, which includes an offer for sale from the parent company intending to offload a 15% stake in its Indian operations.

According to the draft red herring prospectus, the parent company plans to sell around 101.8 million shares, translating to a 15% stake. However, the overall issue size remains undisclosed. The IPO is managed by lead bookrunners including Morgan Stanley India, JP Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India. LG Electronics' decision to halt the IPO comes amidst concerns over potential valuation impacts due to current market conditions, reflecting the uncertainties that major corporations face in navigating volatile financial landscapes.