With plans to list its Indian arm, LG Electronics India, South Korean consumer durable giant LG Electronics Inc on Friday filed a draft red herring prospectus with market regulator SEBI for a planned IPO a public listing on Indian stock exchanges. The issue, which is fully offered for sale, will see the promoter, LG Electronics Inc, give away up to 10.18 crore shares of face value of ₹10 each, which will be issued through a company formation route. order books. The IPO will constitute a sale of 15 per cent stake in the parent company controlling the Indian unit.

This follows South Korean automaker Hyundai India’s IPO in India. If LG Electronics India is listed, it will be the second South Korean chaebol to operate on Indian exchanges at a time when the country’s IPO market is booming. In October, Hyundai Motors Company listed its local unit, Hyundai Motor India, in India’s largest-ever IPO, raising $3.3 billion (₹27,856 crore) through the OFS route.

In its draft prospectus, the appliance and electronics giant said the public listing would improve its visibility, brand image, provide liquidity and a public market for shares in the country.

Since this is a full OFS, LG Electronics India will not receive any proceeds and cleaning up the IPO will fall to the South Korean parent company. The investment bankers involved in the issue are Morgan Stanley India Company, JP Morgan India, Axis Capital, BofA Securities India and Citigroup Global Markets India.

Large wallet

LG Electronics India is a leading player in the field of major appliances and consumer electronics and offers a wide portfolio including, among others, washing machines, air conditioners, refrigerators, panel televisions, micro- waves and dishwashers. It said it was a market leader in the home appliances and consumer electronics category, excluding mobile phones, in terms of volume for the six-month period ended June 30, 2024, according to a Redseer report, he noted in the draft prospectus. The South Korean household appliance giant created its Indian subsidiary in 1997.

The Indian arm of the South Korean home appliance giant recorded an operating revenue of ₹21,352 crore in FY24, up 7.47%. Net profit for the financial year under review stood at ₹1,511 crore, up about 12 per cent from the previous financial year.

Currently, it operates two manufacturing plants in Noida and Pune. “In FY24, we had an installed capacity of 13,99,000 products in our manufacturing units in Noida and Pune collectively,” he notes. The company is also setting up a third manufacturing plant in Andhra Pradesh with an investment of ₹5,000 crore. “In addition to manufacturing products, we also manufacture several key components, such as compressors and motors,” the company said in its DRHP.