LG India Files Draft Prospectus for ₹15,000 Crore IPO

LG India is preparing to launch an IPO putting 101.8 million shares, or an estimated 15 percent of its holdings, on the market. The company has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company aims to raise approximately ₹15,000 crore ($1.77 billion) to fund operations as it ramps up competition with Indian and global companies, including fellow South Korean major Samsung. 

The move comes just a few months after the Indian arm of another South Korean giant, Hyundai, raised ₹27,870 crore in India’s largest issue to date. LG India’s IPO could become India’s fifth-largest ever. 

According to media reports, the books for LG India’s IPO will be managed by Morgan Stanley India, J P Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India.

Quoting the DRHP, media reports also show that LG India claims to be the market leader in India for major home appliances in terms of volume in the first quarter of FY 2024, citing Redseer market research data. LG India also disclosed in the filing that its parent company LG is not currently restricted from competing with it directly in the future. 

As per Data Bridge Market Research, India’s white goods market (residential and commercial) stood at ₹1.04 lakh crores in 2023 and is expected to grow to ₹1.6 lakh crores by 2031, at a 5.5 percent compounded annual growth rate, driven by increasing urbanisation, growing disposable incomes, and a preference for convenience. 

LG India announced just a few weeks ago that it is building a third manufacturing facility in India to supplement the production capacities of its existing plants near Noida and Pune, to address growing demand in multiple consumer product categories. The company had also invested ₹200 crore to expand its Pune factory in early 2023, boosting its annual refrigerator manufacturing capacity by 1,00,000 units.

Competitor Haier has also recently entered a ₹1,000 crore joint venture with Indian conglomerate JSW, aimed at improving its manufacturing capacity and penetrating the unaddressed market in India.