Electronics major LG Electronics India has received the green signal from market regulator Securities and Exchange Board of India (SEBI) to launch its maiden share sale, sources said on Thursday.The Indian arm of the Seoul-headquartered home appliances and electronics company may launch its maiden share sale of Rs 15,000 crore if market conditions are favorable, they said.LGEI filed its draft red herring prospectus (DRHP) with SEBI on December 6. The initial public offering (IPO) is entirely an offer for sale (OFS), in which parent company LG Electronics is looking to sell a 15 percent stake. The IPO could value LGEI at Rs 1 trillion.LGEI’s IPO will make it India’s fifth-largest issue, while another South Korean company, Hyundai Motor India (HMI), tops the list with its Rs 27,870-crore IPO in October last year. HMI’s IPO was also entirely OFS, with Seoul-based Hyundai selling a 17.5 percent stake in its Indian unit.In India, LG Electronics is the largest home appliance and consumer electronics company after Samsung India Electronics. The company competes with global and Indian brands, including Voltas, Havells, Godrej, Blue Star, Haier, Whirlpool, Philips, Samsung, and Sony. Morgan Stanley India, JPMorgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India are the book-running lead managers for the IPO.LGEI said in its DRHP that India’s appliances and electronics market has grown at a rate of around 7 percent over the last five years, and this growth is expected to increase to around 12 percent over the next five years, driven by rising disposable incomes, increasing urbanization, and increasing access to appliances and electronics in both urban and rural areas.According to the company’s DRHP, LGEI’s revenue from operations stood at Rs 21,352 crore in FY24, while Samsung India Electronics’ revenue was Rs 99,541.6 crore in the previous financial year. The company plans to further strengthen its position through an IPO.LG Electronics India, a leading company in home appliances and consumer electronics, promotes products through promotional campaigns, sales promoters, and a strong pan-India distribution network. It also ensures consumer satisfaction and market leadership through a comprehensive service of 949 service centers, 12,590 engineers, and same-day installation.It operates with a pan-India supply chain network comprising 25 warehouses, which help optimize costs through effective inventory management, faster deliveries, shipping directly to business partners, and reducing delivery time and third-party dependency.In 1958, LG Electronics was founded as Goldstar. It was established after the Korean War to provide domestically produced consumer electronics and home appliances to the rebuilding nation. The country’s introduction of national broadcasting created a booming electronics market, and its close relationship with Hitachi helped Goldstar produce South Korea’s first radios, televisions, refrigerators, washing machines, and air conditioners. Goldstar was one of the LG conglomerates, with a brother company, Luck-hui (pronounced “Lucky”) Chemical Industrial Corp., now LG Chem and LG Household & Health Care. Goldstar merged with Lucky Chemical and Goldstar Cable on 28 February 1995. LG’s number of designs published under the Hague system in 2024 ranked 4th in the world, with 352 design registrations published during 2023.Talking on this topic, Lakshit Jain, an equity analyst at EY, said, “LG Electronics India Limited’s IPO aims to enhance visibility and brand image and provide liquidity through equity share listing. It is a market leader in home appliances and consumer electronics, dominating across the country in various product categories. LG Electronics India Ltd IPO financial analysis shows mixed performance. Revenue has grown steadily, but declines in profitability, Earnings per share as well as rising debt dependence and declining liquidity cause concern, although inventory turnover and assets have increased. Equity has increased steadily over time, reflecting potential growth and expansion. However, the debt-to-equity ratio has increased, reflecting rising reliance on debt financing. The decline in profitability could be a cause of concern for investors. Assets have increased, indicating potential business growth. Overall, the IPO is worth a chance for investment.”
Reporting to True to Life News.