New Delhi: South Korea’s LG Electronics’ Indian subsidiary has filed for an initial public offering (IPO) to capitalize on the country’s surging consumer durables demand and heightened interest in stock market listings. The offering, announced on Friday, is expected to be one of the largest IPOs in India this year.
The parent company plans to sell 101.8 million shares, with no new shares being issued as part of the sale. The IPO is estimated to be worth ₹152.37 billion ($1.80 billion), according to a report by Moneycontrol.
Robust IPO Market in India
India’s IPO market has seen remarkable activity in 2024, with 298 companies raising $16.65 billion, more than double the funds raised in 2023, as per S&P Global Market Intelligence. However, fluctuating stock market conditions, exacerbated by foreign investors turning net sellers last month, may pose challenges to the IPO’s listing.
“LG faces increasing competition against its rivals, and the focus would now be on pricing for the IPO,” said Mahesh Ojha, a research analyst at Hensex Securities.
Consumer Electronics Growth in India
LG Electronics India, known for its popular washing machines and refrigerators, is well-positioned in a domestic market projected to grow at 12% annually over the next five years, according to research cited in the draft prospectus. The growth is driven by increasing penetration of appliances and electronics in both urban and rural areas.
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The company competes with industry leaders such as Whirlpool of India and Samsung’s Indian unit. It reported a profit of ₹15.11 billion in the last fiscal year, a 12% increase compared to fiscal 2023.
Strategic Backing and Management
Morgan Stanley, J.P. Morgan, BofA Securities, and Citi are serving as lead book-running managers for the IPO.
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Despite intense competition and market volatility, LG Electronics India’s move reflects confidence in the long-term potential of India’s consumer electronics market, bolstered by growing demand across demographics.
