LG Electronics said to launch $1.3 billion India IPO after pause

The South Korean company secured regulatory approval for its updated draft red herring prospectus on Thursday

LG Electronics Inc.’s India arm is set to launch its initial public offering to raise about 115 billion rupees ($1.3 billion) in the week beginning Oct. 6, according to people familiar with the matter.

This values the company around $9 billion, the people said, significantly below the $15 billion it was expecting in December when the papers were filed the first time.

The South Korean company secured regulatory approval for its updated draft red herring prospectus on Thursday and is preparing to file the final version early next week, the people said, asking not to be identified as the information isn’t public.

This would make it the third billion-dollar IPO to hit the market after HDB Financial Services Ltd. and Hexaware Technologies Ltd. in a year which has seen over $10 billion being raised through new offerings.

Discussions are ongoing, and the size and timing of the IPO may still change, the people said.

LG Electronics India Ltd. first filed papers with the Securities and Exchange Board of India in December, with plans for its parent to sell 101.8 million shares or a 15% stake, according to the draft prospectus. The approval came through in March, but the company deferred the issue as market volatility around that time dragged the valuation to between $10.5-$11.5 billion.

Last month, it filed its updated draft prospectus.

A representative for LG Electronics didn’t respond immediately to requests for comment.

Separately, LG Electronics India said this year it will invest about $600 million over four years in a new factory in Andhra Pradesh, its third plant in the country.

Axis Bank Ltd., along with the Indian units of Morgan Stanley, JPMorgan Chase & Co, BofA Securities Inc. and Citigroup Inc., are the advisers to the share sale, according to the draft prospectus.