LG Electronics India Pvt. Ltd., a subsidiary of the South Korean consumer electronics giant LG Electronics Inc., has submitted an application for an initial public offering (IPO) in India. According to reports, the IPO aims to garner up to $1.8 billion, approximately 15,000 crore rupees.
The company has lodged a draft prospectus with the Securities and Exchange Board of India (SEBI) to offer 101.82 million shares, each with a face value of 10 rupees. This offering will represent 15% of the post-offer paid-up equity share capital of its Indian division.
All funds generated from this offering will be transferred to LG Electronics, the parent entity.
Morgan Stanley, JP Morgan, Axis Capital, BofA Securities, and Citi are designated as managers for the IPO.
In a related development, LG Electronics India has announced its intention to establish a new manufacturing facility in Andhra Pradesh, aimed at expanding its production capacity within the country.
Currently, the company produces its range of electronics at its manufacturing facilities in Noida and Pune.
Established in January 1997, LG Electronics India offers a variety of electronic products, including washing machines, televisions, air conditioners, and refrigerators. In 2024, the company's revenue reached 21,353.4 crore rupees, with profits totaling 1,511.0 crore rupees, both reflecting an increase from the previous year.
In its SEBI filing, the company highlighted its strategy to increase the procurement of raw materials from local sources. This approach is intended to better address consumer demand while reducing inventory and associated costs, ultimately enabling the company to price its products more competitively.
Despite efforts to localize production, LG Electronics India continues to depend on other members of the LG Group for foreign components and finished products, especially for its premium segment. These imports predominantly come from countries like China, South Korea, and Japan, aligning with a strategic emphasis on product quality and technological enhancement.
The company has also expressed concerns about competition from both global brands, including its South Korean parent, and Indian companies within the consumer electronics and home appliances sector. Notable competitors include Voltas, Havells, Godrej, Blue Star, Haier, Whirlpool, Philips, Samsung, and Sony. Furthermore, competition also arises from new business models linked to brands launched by consumer electronics retail chains.
