 "LG Electronics India files for IPO; South Korean parent to sell 15% stake")
(This report has been updated) LG Electronics India Ltd, a subsidiary of the South Korean chaebol LG, on Friday filed preliminary papers with markets regulator Sebi for an initial public offering wherein the parent company will sell over 10.18 crore shares amounting to 15 per cent stake.
After the listing of Hyundai Motors India Ltd, LG Electronics will be the second South Korean company that will tap the Indian stock market.
The proposed IPO is entirely an offer for sale (OFS) of 10.18 crore equity shares by promoter LG Electronics Inc with no fresh issue component, according to the draft red herring prospectus (DRHP).
Its South Korean parent company LG Electronics Inc will sell 10,18,15,859 equity shares of face value of Rs 10 each, according to DRHP. Since the public issue is completely an OFS (Offer For Sale), LG Electronics India will not receive any IPO proceeds. The funds raised will go to the South Korean parent.
The price band for the offer will be decided through the book building process as well as on the quantitative and qualitative factors.
Over the price band and the offer price, LG said it will be determined by the Company, in consultation with the Book Running Lead Managers "on the basis of assessment of market demand for the Equity Shares offered through the Book Building Process and on the basis of quantitative and qualitative factors".
Post-offer, its shareholding will be diluted by 15 per cent to 57.69 crore shares in the company.
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There will not be any pre-IPO placement for LG Electronics India.
In its draft papers, LG Electronics India said it expects the listing of the equity shares will enhance its visibility and brand image and provide liquidity and a public market for the shares.
LG Electronics has allocated 60 per cent of the QIB Portion (Qualified Institutional Buyers) to anchor investors.
"One-third of the anchor investor portion shall be reserved for allocation to domestic mutual funds, subject to valid bids being received from domestic mutual funds at or above the price at which equity shares are allocated to anchor investors in the offer," it said.
LG Electronics India is a leading player in major home appliances and consumer electronics. The company products are sold to both B2C and B2B customers in India and internationally. It also provides installation, repair, and maintenance services for all its products.
The merchant bankers for the issue are -- Morgan Stanley India Company, JP Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India.
LG Electronic India's revenue from operations was Rs 64,087.97 crore for the financial year ended March 31, 2024.
It manufactures and sells products including washing machines, refrigerators, LED TV panels, inverter air conditioners, and microwaves. It has manufacturing units at Noida (UP) and Pune.
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