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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Seoul, September 30 – LG Electronics announced that its Board of Directors has approved the sale of a 15% stake (101,815,859 shares) in its Indian subsidiary, a transaction estimated to be worth approximately KRW 1.8 trillion (USD 1.3 billion).
In line with the board resolution, LG Electronics plans to file the final prospectus with the Securities and Exchange Board of India (SEBI). The IPO process is expected to be completed as early as next month. While the specific disposal date and final amount have not yet been determined, the company stated it will disclose the public offering price band and schedule once SEBI grants final approval.
LG Electronics had submitted its preliminary IPO application in December 2023 and received conditional approval from SEBI in March 2024. Although initial expectations suggested the listing could occur in the first half of the year, the company took a cautious approach, citing volatility in the Indian stock market and global financial conditions.
The Indian unit’s listing will be executed entirely through a secondary share sale, with no new issuance of shares. As a result, the full proceeds will flow directly to LG Electronics headquarters, enabling significant cash inflows without incurring additional interest or financial risks. Analysts estimate the offering size at around 115 billion Indian rupees (approx. KRW 1.8 trillion)—a figure exceeding LG Electronics’ standalone cash and cash equivalents of KRW 1.1 trillion as of the end of Q2.
Industry analysts view the move as a major financial catalyst. In a research report published on September 18, IBK Investment & Securities analysts Kim Woon-ho and Kang Min-gu noted:
“Although Q4 is traditionally an off-season, the listing of the Indian subsidiary is expected to dramatically improve cash flow.”
Similarly, global rating agency Moody’s commented in February that the planned IPO of LG Electronics India would serve as “a key driver to further strengthen the company’s financial profile.”
More global corporations are turning to India’s capital markets to raise funds and accelerate local operations. Companies such as Whirlpool (home appliances), Oracle (IT), Moody’s (credit ratings), Suzuki Motor (automotive), and Nestlé (food) have already listed their Indian subsidiaries.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
