THE Indian unit of South Korea’s LG Electronics filed for an initial public offering (IPO) on Friday (Dec 6) to cash in on the country’s growing demand for consumer durables amid higher appetite for IPOs.
The Indian firm said its parent company will sell 101.8 million shares as part of the offering. No new shares will be issued for sale.
The IPO for LG Electronics India, which sells washing machines and refrigerators, is valued at 152.4 billion rupees (S$2.4 billion), as per a Moneycontrol report, ranking it among the top five in the country this year.
About 298 companies listed on the Indian bourses have raised US$16.65 billion in 2024, as per data compiled by S&P Global Market Intelligence – more than double the amount raised last year.
However, Indian stock markets, which saw a recent downtrend, have since moderated as foreign investors turned net sellers last month. This volatility in market conditions poses some risk for the IPO’s listing, said Mahesh Ojha, research analyst at Hensex Securities.
“LG faces increasing competition against its rivals and the focus would now be on pricing for the IPO,” Ojha added.
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India’s appliances and electronics market is projected to grow about 12 per cent in the next five years, as per LG’s analysis, which cited Bangalore-based consultancy firm RedSeer.
The growth in the sector is expected to unfold on the back of increasing penetration of appliances and electronics in both urban and rural areas, the draft prospectus showed.
LG Electronics India competes with Whirlpool of India, Samsung’s India unit among others in the domestic market, and reported a profit of 15.1 billion rupees in the last fiscal, 12 per cent higher than fiscal 2023.
Morgan Stanley, JPMorgan, BofA Securities and Citi are among the IPO’s lead book-running managers. REUTERS
