The primary market is all set to see the launch of one of the first big-ticket IPOs of 2025 as LG Electronics India Ltd has received Sebi’s nod for floating its public issue. The consumer electronics manufacturer plans to raise Rs 15,000 crore via its IPO.
Notably, this is the second major public issue in the Indian market from a South Korea-based company after Hyundai Motors India launched its IPO in the second half of 2024.
Earlier in December 2024, the consumer electronics behemoth had filed its Draft Red Herring Prospectus with the regulator. Ahead of the much-awaited IPO’s launch, here’s a look at some key details about the public issue:
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Pure OFS IPO
As per LG Electronics India’s DRHP, the public is structured as a pure Offer-For-Sale and has no fresh issue component. This means that the entire Rs 15,000 crore raised will go to the South Korean parent, LG Electronics Inc., and not to the Indian subsidiary. Investors should note that this IPO won’t bring additional capital to LG’s Indian operations.
LG Electronics India IPO Objective
LG Electronics Inc. the company plans to offload more than 10.18 crore shares in the IPO, which makes up for nearly a 15 per cent stake in LG Electronics India. The listing is expected to provide IPO investors with an opportunity to own a share in the company, on the other hand, the majority stake and decision-making will still remain with LG Electronics Inc.
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LG Electronics India IPO: Financial Performance
The consumer electronics manufacturer’s revenue from operations for the quarter ended June 30 of FY25 stood at Rs 6,408.8 crore. The company’s revenue from operations for the fiscal year ended March 31, 2024, stood at Rs 21,352 crore increasing by 7.46 per cent compared to Rs 19,868 crore in the fiscal year ended March 31, 2023.
LG Electronics India IPO: Risks
LG Electronics India informed potential investors about the probable risks the business faces. Here’s a look at some key risks mentioned in the DRHP:
The company added that it pays royalties to LG Electronics, the company’s Promoter, under the License Agreement. The company mentioned that any adverse change in its relationship with LG Electronics and the companies in the LG Group could have an adverse impact on its business
The company added that it may not be able to compete successfully in the highly competitive and fast-evolving home appliances and consumer electronics markets, this in turn could negatively impact its business
The company stated that it sells its products through multiple distribution channels and its top-10 sales trade partners contribute significantly to the sales. Thus any disruption in the company’s relationship with these trade partners could adversely impact its operations
The company added that it primarily depends on LX Pantos for its transportation and warehouse logistics and any failure on the logistics partners’ part to provide services could negatively impact its operations
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LG Electronics India IPO: Strengths
The company mentioned some of its key strengths in its DRHP such as:
The company has the highest market share in the home appliances and consumer electronics industry in India
The company has a pan-India distribution and after-sales service network
LG Electronics India maintains operational efficiency through strong manufacturing capabilities and a localized supply chain
The company claims that it has a capital-efficient business with high growth and profitability
LG Electronics India IPO: Registrar
The book-running lead managers for LG Electronics India’s public issue include Morgan Stanley India Company Pvt Ltd, J.P. Morgan India Private Ltd, Axis Capital Ltd, Bofa Securities India Ltd, and Citigroup Global Markets India Private Ltd. The registrar for the consumer electronics maker’s public issue is Kfin Technologies Ltd.
