LG Electronics is reportedly seeking a valuation of $8.7 billion for its India unit as it prepares to launch its initial public offering (IPO). According to a Bloomberg News report, the South Korean company is planning to sell up to 101.8 million shares, representing a 15% stake, in its Indian unit. The IPO price is expected to be between 1,080 rupees and 1,140 rupees per share.
The IPO is set to open on October 7 and close on October 9. LG Electronics India received SEBI's (Securities and Exchange Board of India) approval for the IPO in March.
The valuation sought has fluctuated. When LG Electronics India initially filed its draft papers with SEBI in December 2024, it was aiming for a valuation of $15 billion. However, market volatility led to a revised valuation of around $9 billion. Some reports suggest a valuation of $12.5 billion based on the Red Herring Prospectus.
Several firms are advising LG Electronics India on the IPO, including Axis Bank, Morgan Stanley India, JPMorgan India, BofA Securities India, and Citigroup India.
LG Electronics is also increasing its investment in India, with plans to invest approximately $600 million over the next four years to establish a new factory in Andhra Pradesh. This will be its third plant in the country.
If the IPO is successful, LG Electronics India will be the second South Korean company to list on the Indian stock market, following Hyundai Motors India Ltd., which listed in October 2024. The company's listed peers in India include Havells India Ltd., Voltas Ltd., Whirlpool of India Ltd., and Blue Star Ltd.
In fiscal year 2024, LG Electronics India made a profit of Rs 1,511 crore. The company paid a dividend of Rs 2,093 crore, or Rs 185 per share. In the first quarter of the current fiscal year, the company reported revenue of Rs 6,409 crore and a profit of Rs 680 crore. As of June 30, the company had a cash balance of Rs 3,606 crore.
LG Electronics expects to complete the IPO of its Indian subsidiary as early as next month to secure funding for future growth. The expected proceeds are expected to exceed LG Electronics' standalone cash and cash equivalents of 1.1 trillion won as of the end of June. Analysts, including Moody's Investors Service, believe that the listing of the Indian unit will further strengthen LG Electronics' financial profile. Following the IPO, LG Electronics will retain an 85 percent stake in the unit.
