LG Electronics India is gearing up to take a significant step in the financial market by preparing to submit its updated draft red herring prospectus (UDRHP) for a massive ₹15,000 crore IPO. This submission is expected to happen early next month, which will pave the way for its entry into the bustling Dalal Street later that same month.

Upcoming IPO and Executive Visit

Sources indicate that Cho Joo-wan, the CEO of LG Electronics, plans to visit India during the IPO launch event. This visit underscores the company’s commitment to strengthening its presence in the Indian market.

In response to inquiries about the IPO, a company spokesperson stated, “We do not comment on market speculation or rumours.” This highlights the company’s cautious approach as it prepares for this major financial move.

Investor Engagement and Market Approval

To generate interest among investors, LG has already initiated roadshows, following the Securities and Exchange Board of India (SEBI) granting approval for the IPO back in March. The company plans to raise approximately ₹15,000 crore through an offer for sale of a 15% stake in its Indian subsidiary, showcasing its growth ambitions.

• Key Financials:
  • IPO Size: ₹15,000 crore
  • Stake Offered: 15%
  • SEBI Approval: March 2023

Market Dynamics and Future Prospects

Market analysts have expressed concerns that LG might have to adjust its valuation due to recent market fluctuations. However, the true picture regarding the IPO valuation will only emerge once the UDRHP is officially filed.

This IPO is anticipated to boost LG’s expansion efforts into other Asian and African markets, particularly as it seeks to reduce its dependency on North America following the introduction of significant import tariffs by the USA last week.

Commitment to Indian Market

In a recent address, Cho emphasized LG’s aspiration to become a prominent national brand in India, stating, “We aim to transform the market’s potential into a reality.” This commitment is further illustrated by the company’s plans to establish its third consumer electronics manufacturing facility in Sri City, complementing its existing factories in Noida and Ranjangaon.

Competitive Edge in Consumer Durables

LG Electronics has positioned itself as a formidable player in India’s consumer durables market, competing with brands like Samsung, Voltas, and Whirlpool. According to market estimates:

• 33.5% of the washing machine market
• 28.7% of the refrigerator sector
• 25.8% of the TV market
• 19.4% of the air conditioner market

In the fiscal year 2024, LG reported record revenue figures, with a 14.8% increase in sales to approximately $2.8 billion in India, and a striking 43.4% surge in net profit year-on-year.

Innovative Services on the Horizon

In addition to its IPO plans, LG is set to launch a nationwide appliance rental service. Initially tested in exclusive stores last year, this service aims to cater to premium customers and enhance overall consumer satisfaction. The company stated, “We plan to expand this across our distribution network to offer differentiated services and drive sales.”

As LG Electronics continues to innovate and expand, its IPO marks an exciting chapter in its journey within the Indian market, further solidifying its status as a leader in consumer electronics.