LG Electronics, the big South Korean player in home appliances, is gearing up to wrap up the initial public offering (IPO) for its Indian arm as soon as next month. The move aims to raise cash for boosting growth in one of the world’s fastest-growing markets.
The IPO for LG Electronics India Ltd. could bring in about 1.8 trillion won, or roughly $1.28 billion, based on reports from industry insiders and Yonhap news agency. LG’s board just greenlit selling off a 15% stake in the subsidiary as part of this stock market debut. While the exact sale date and price remain under wraps, the company shared the news in a recent press release.
Next up, LG plans to file its final securities report with India’s Securities and Exchange Board (SEBI). The offering should close right after SEBI stamps it with final approval. LG kicked off the IPO process back in December with an initial application and snagged conditional okay from SEBI in March.
This influx of funds looks huge—it’s way more than LG’s current cash pile of 1.1 trillion won at the end of June. Experts at Moody’s Investors Service point out that listing the Indian unit will beef up LG’s overall financial health.
The IPO could peg the value of LG Electronics India at over 12 trillion won, putting it ahead of rivals on the Indian stock exchange. For comparison, Voltas Ltd., tied to India’s Tata Group in consumer electronics, sits at around 7.2 trillion won, while Whirlpool of India clocks in at about 2.4 trillion won.
After the deal, LG will hang onto 85% of the subsidiary, keeping a strong grip on its Indian operations.
India’s booming appetite for consumer durables like refrigerators and TVs is pulling in global giants to list on the local stock market. Just last year, Hyundai Motor Co. scored a massive $3.3 billion from its Indian IPO, setting a high bar for companies eyeing expansion there.
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