Right after Hyundai announced its plans for an IPO of its Indian subsidiary, LG Electronics CEO indicated a similar move for its Indian unit, citing the country’s potential to help achieve its $75 billion earnings goal.
LG Electronics is contemplating an initial public offering (IPO) for its wholly-owned Indian operations. The company’s CEO, William Cho, stated that it aims to leverage the thriving stock market to achieve its $75 billion global revenue goal in electronics by 2030.
Cho, who took on the CEO role in 2021 after over 30 years with the company, targets boosting the electronics division’s annual revenue to 100 trillion won ($75 billion) by the next decade. However, the company’s total revenue was only $65 billion (approximately) in 2023.
To achieve this, LG Electronics plans to increase revenue from enterprise clients, aiming to generate around 45% of sales from other companies by the end of the decade, up from the current 35%.
Cho told Bloomberg that an IPO in India is one of several possibilities being considered, acknowledging growing interest from global investors. However, he emphasised that no decision has been made yet, and neither LG has determined the potential valuation for India despite monitoring IPO trends and comparable industry cases in the domestic market.
The announcement followed after another Korean company, Hyundai Motor India, went public with a Rs 250 billion IPO. According to the Economic Times, the electronics sector is speculating whether Samsung will consider an IPO for its Indian operations, as the three major South Korean conglomerates often align their strategies.
Speaking about LG’s IPO, Cho stated that launching in the Indian market is one of several strategies being considered to rejuvenate LG’s long-standing consumer electronics division. This is the first time the South Korean company, which directly competes with the larger Samsung, has publicly discussed the possibility of entering the Indian market.
In India, LG aims to maintain its swift growth. In the first half of this year, revenue from LG’s Indian division increased by 14% to a 2.87 trillion won, while net income grew by 27% to 198.2 billion won.
According to the CEO, LG’s IPO would align with a thriving Indian capital market. 189 companies plan to raise $5.6 billion this year, and he sees the market to be exceptionally active, with at least 30 IPOs in the pipeline, driven by strong domestic demand.
Furthermore, LG plans to develop new business areas each generating over 1 trillion won annually, focusing on heating, ventilation, and air-conditioning. The company operates 11 production sites globally, with chillers for AI data centres experiencing 40% annual growth in overseas sales.
The company also plans to introduce its home appliance subscription service in India later this year, following recent launches in Malaysia and with future expansions in countries like Taiwan and Thailand.
