K-Drama continues on D-Street: LG Electronics India files for mega $1.8-bn IPO

K-Drama continues on D-Street: LG Electronics' India arm files for mega $1.8-bn IPO

South Korea's LG Electronics Inc has emerged as the latest MNC to move ahead with listing plans of its India unit as the consumer durables giant filed draft papers with the market regulator for a big-bang IPO by its subsidiary LG Electronics India.

On May 28, Moneycontrol broke the story that LG Electronics Inc was weighing a listing of its India unit on the domestic bourses.

"This is a really large deal and the issue size is expected to be around $1.8 bn or Rs 15,237 crore," a source in the know told Moneycontrol.

With a size of around $1.8 billion (Rs 15,237 crore), the LG Electronics India public issue will enter the top 5 club of India's biggest IPO's which includes Hyundai Motor India, LIC, Paytm and Coal India.

"This is a pure OFS or offer for sale by the parent," said a person quoted above. As per DRHP, the OFS consists of 101 million shares.

"Morgan Stanley, JPMorgan, Axis Capital, Citi and BofA Securities are the investment banks working on the deal. Shardul Amarchand Mangaldas and Cyril Amarchand Mangaldas are the company counsel and banks' counsel, respectively. The Indian market has attractive multiples, and a public listing will lead to a stronger India connection ," two other persons familiar with the listing plans shared.

All the persons quoted above spoke on the condition of anonymity.

"Our company expects that listing of the equity shares will enhance our visibility and brand image and provide liquidity and a public market for the equity shares in India," said LG Electronics India in DRHP.

An email query has been sent but Moneycontrol could not elicit an immediate comment from LG Electronics Inc. This article will be updated as soon as we hear from the firm. The advisors couldn't be reached for an immediate comment.

In October, another South Korean major, Hyundai Motors Company, listed its local unit Hyundai Motor India, India's biggest-ever IPO at $3.3 bn or Rs 27,856 crore.

In an interview to Bloomberg 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 said.

He added, "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."

According to a report dated October 29 by Business Standard, LG Electronics India reported a 7 per cent rise in revenues to Rs 21,557 crore in FY24, with the net profit rising by 12 per cent to Rs 1,511 crore in the same period.

Refrigerators constituted 27 per cent of the company's revenue, followed by 21 per cent by washing machines and 20 per cent each by televisions and air conditioners, the report added.

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.

On June 24, Moneycontrol was the first to report that Italy's Carraro Group, an agricultural equipment maker and a leader in transmission systems for tractors and off-highway vehicles, had short-listed advisors to launch an IPO and unlock value in its Indian unit.