South Korean electronics multi-national LG Electronics has filed the draft red herring prospectus for its public issue of Indian business with the capital market regulator Sebi on December 6, as per a notification on BSE.
Moneycontrol was first to report about the imminent filing of the DRHP in an exclusive newsbreak. One of the people familiar with the development had said the size of the issue is likely to be over Rs 15,000 crore, “This is a really large deal and the issue size is expected to be around $1.8 billion or Rs 15,237 crore.” The issue will be a Offer for Sale of up to 10.18 crore equity shares of face value of Rs 10 each, and the company will not receive any proceeds from the IPO.
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At this size, the public issue will be among the country’s top five biggest IPOs ever.
The document shows Morgan Stanley, JPMorgan, Axis Capital, BofA Securities and Citi to be the lead managers of the issue.
The DRHP pegs India’s appliances and electronics market to reach Rs 10 lakh crore (around $120 billion) by 2028, driven by various growth tailwinds. The last five years have seen the appliances and electronics market grow at around 7%, and this is expected to accelerate to around 12% in the next 5 years. India’s rising disposable income, increasing urbanization and penetration of appliances in both urban and rural areas are among the key factors driving this growth potential.
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LG Electronics India said it is the market leader across various product categories such as washing machines, refrigerators, televisions, inverter ACs, and microwaves, with the offline channel contributing to around 80% of the market (excluding mobile phones) in India in value terms, as of June 2024.
In an interview to Bloomberg News in August, LG Electronics CEO William Cho spoke about the significance of the Indian market for the firm.
“We see a lot of growth potential in other emerging markets like India, Latin America and Middle East. In India, we boast number one market share in every single product. India is one of the fastest growing markets in the world and will continue to be a key market for our growth,” Cho had said.
“We aim to be a national brand in India and as a company we have grown and are loved by Indian people, providing the products and solutions which will eventually make their life better. I understand there is increased interest in the Indian market amongst global investors. It (India IPO) is one of the multiple options we can consider, it is not yet confirmed,” CEO William Cho added.
For the quarter-ended June 2024, LG Electronics India registered total revenue from operations at Rs 6408.8 crore, with more than three-fourth of it coming from home appliance and air solutions division (78.97%). For FY24, the total revenue was Rs 21,352 crore.
Since 2022, LG India has been investing to enhancing its production facilities and upgrading equipment and manufacturing processes to improve efficiencies. “We expect to continue making investments to support our growth. We intend to construct a third manufacturing unit in Andhra Pradesh to expand our manufacturing capacity to address the potential growth
in demand for products,” the DRHP said.
Norways Orkla ASA, which owns MTR Foods, Coca-Cola, which has an Indian bottling firm Hindustan Coca-Cola Beverages, and German auto parts maker Mahle are other MNCs eyeing a listing of their local businesses.
