After Hyundai IPO, another South Korean giant plans to bring public issue soon; check details

After the successful listing of Hyundai Motors India Limited (HMIL) last month, the Indian subsidiary of another South Korean giant has apparently set the ball rolling for the launch of its initial public offering (IPO).

LG Electronics India Limited, a wholly owned subsidiary of LG Electronics, is creating a lot of buzz among investors and market observers for its IPO preparations. LG Electronics India has a business presence in consumer electronics and home appliances.

Recently, the company added Axis Capital Limited to the group of banks managing its potential IPO. In September 2024, Bloomberg reported that LG had appointed banks, including Bank of America Corp., Citigroup Inc., JPMorgan Chase and Co., and Morgan Stanley, as arrangers for its IPO, which may occur as early as next year.

The Bloomberg report mentioned that LG may seek to raise $1-1.5 billion (₹12,612 crore) from the share sale, which could give LG Electronics India Private Limited a valuation of about $13 billion.

Ahead of the launch of the IPO, LG Electronics and its parts suppliers are reportedly planning to invest a total of ₹7,000 crore to build the company’s third factory and create a vendor base in Sri City, Andhra Pradesh. LG Electronics will invest ₹5,000 crore and its Korean and Chinese parts suppliers the remainder, according to a report.

In recent months, many multinational corporations (MNCs) have planned to list shares of their Indian subsidiaries mainly due to the evolving landscape of India's stock market, which presents a promising opportunity for MNCs to unlock value for their Indian subsidiaries via IPO. Besides LG Electronics, Coca-Cola and Walmart could launch public issues of their respective subsidiaries.