LG Electronics Eyes Indian IPO To Hit $75 Billion Revenue Target By 2030 Amid IPO Flurry; Check Details

LG Electronics Inc is contemplating an initial public offering (IPO) for its Indian operations. This move would leverage India's robust stock market as a key driver to achieve the company's goal of reaching $75 billion in electronics revenue by 2030. The South Korean tech giant, known for its consumer electronics, is exploring this strategy as part of broader efforts to revitalize its decades-old business.

The potential IPO comes at a time when India's capital markets are experiencing a historic boom. With approximately 189 companies looking to raise $5.6 billion through public offerings in 2024, the Indian market is one of the busiest globally. This surge is driven by strong domestic investor interest, which has spurred companies across various sectors to consider going public. Notably, Hyundai Motor Co., another South Korean conglomerate, is also preparing for a substantial $3.5 billion IPO in India, highlighting the appeal of the Indian market to global corporations.

LG Electronics CEO William Cho, who has been with the company for over three decades and took the helm in 2021, acknowledged the increasing interest from global investors in the Indian market. "It is one of many options we can consider," Cho told Bloomberg Television, indicating that while the IPO is under consideration, no final decision has been made yet.

Under Cho's leadership, LG Electronics has set a target to grow its electronics business to an annual revenue of 100 trillion Won (approximately $75 billion) by 2030. This goal represents an increase from the company's revenue of about $65 billion in 2023. To achieve this, LG plans to diversify its revenue streams, particularly by increasing its earnings from enterprise clients. Currently, 35% of the company's sales come from other businesses, but LG aims to boost this to 45% by the end of the decade.

In India, LG's growth trajectory has been impressive. The company's Indian unit reported a 14% increase in revenue to a record 2.87 trillion won in the first half of 2024, while net income surged by 27% to 198.2 billion won.

While LG is best known for its consumer electronics, the company is actively exploring new business avenues that could each generate over 1 trillion won in annual revenue. One such area is heating, ventilation, and air conditioning (HVAC), where LG has established a global presence with 11 production sites. The company's chillers, large air conditioning units used in buildings, have seen a 40% annual growth in overseas sales over the past three years, driven by the rising demand from artificial intelligence (AI) data centres.

Additionally, LG is expanding its subscription services for home appliances, a model that has gained traction in South Korea. By allowing customers to rent products such as washing machines and laptops for a monthly fee, LG offers affordability and convenience. This subscription model, which already attracts 35% of consumers in Korea, is being rolled out in new markets including Malaysia, Thailand, Taiwan, and India, with plans to extend it to the US and Europe. LG expects revenue from its subscription business to grow by 60% to about $1.3 billion in 2024.

In a bid to capitalize on the digital shift, LG is also investing heavily in its free ad-supported streaming services. The company plans to invest 1 trillion won by 2027 to expand its webOS-based advertising and content business.

Cho's vision for LG's future is shaped by his extensive international experience, having worked in North America, Germany, and Australia. "Half of my career was spent outside Korea, and it is about understanding customers and creating new business models for them," he said.