LG Electronics to sell 15 pc stake in Indian unit as part of IPO process
LG Electronics, South Korea's leading home appliance maker, said on Tuesday it expects to complete the initial public offering (IPO) of its Indian subsidiary as early as next month to secure funding for future growth.
The IPO of LG Electronics India Ltd. is estimated to be worth around 1.8 trillion won ($1.28 billion), according to industry sources, reports Yonhap news agency.
LG Electronics said its board has approved the sale of a 15 percent stake in the subsidiary as part of the IPO process. The sale date and pricing details have not yet been determined, the company said in a press release.
The company plans to submit its final securities report to the Securities and Exchange Board of India (SEBI), with the offering expected to close once SEBI gives final approval.
LG Electronics began the IPO process in December by submitting a preliminary listing application and received conditional approval from SEBI in March.
The expected proceeds far exceed LG Electronics' standalone cash and cash equivalents of 1.1 trillion won as of end-June.
Analysts, including Moody's Investors Service, have said the Indian unit's listing would further strengthen LG Electronics' financial profile.
The IPO is expected to value the Indian subsidiary at more than 12 trillion won, well above peer companies listed on the Indian stock market. Voltas Ltd., a consumer electronics affiliate of India's Tata Group, is valued at around 7.2 trillion won, while Whirlpool India has a market capitalization of about 2.4 trillion won.
Following the IPO, LG Electronics will retain an 85 percent stake in the unit, the release said.
India's growing demand for consumer durables has drawn increasing interest from global companies in the local stock market. Last year, Hyundai Motor Co. raised a record $3.3 billion through its Indian listing.
