Upcoming IPO: South Korea's LG Electronics IPO Gets Sebi's Nod; Bigger Than Hyundai, Tata Capital IPOs?

LG Electronics IPO: South Korean-based leading home appliance giant, LG Electronics has reportedly received market regulator Sebi's approval for launching its initial public offering (IPO). This makes LG Electronics the second South Korean company that will enter the Indian stock market, after Hyundai.

The auto player Hyundai listed on BSE and NSE in 2024, and by far, it is the mother of all IPOs in India. Will LG Electronics IPO be greater than Hyundai's?

Apart from this, the timeline of the LG Electronics IPO is yet to be known. Another mega IPO of Tata Capital is also much-awaited and expected to be launched in 2025. Will the size of LG Electronics IPO be bigger than Tata Capital IPO?

Although the size of the IPO is not disclosed, as per PTI report, LG Electronics' public offer could be worth Rs 15,000 crore.

After the approval of the IPO, the date, price bands, allotment, GMP and listing details will be revealed in due course.

If LG Electronics IPO would be of Rs 15,000 crore size, it would be smaller than the upcoming Tata Capital IPO or the already listed Hyundai IPO.

Tata Group-backed Tata Capital is likely to launch its biggest-ever IPO in the range of Rs 17,000 crore to Rs 18,000 crore size. Sources told PTI that Tata Capital IPO is likely to file preliminary papers with markets regulator SEBI to raise $2 billion through an initial public offering (IPO) only after getting final approval from the NCLT for Tata Motors Finance merger with the company.

Meanwhile, South Korean-based Hyundai IPO was launched in October 2024, followed by its listing in that month as well. The size of the IPO was Rs 27,870.16 crore, making Hyundai the biggest-ever IPO in the Indian market's history.

LG Electronics IPO Details:

LG Electronics filed its draft prospectus with Sebi on December 6, 2024. As per the draft, the IPO is entirely offer for sale (OFS), where selling shareholders will offload up to 101,815,859 equity shares having face value of Rs 10 each.

Companies like Morgan Stanley, JP Morgan, Axis Capital, BofA Securities, and Citigroup Global Markets are the book-running lead managers of the IPO. While KFin Technologies is the registrar of the IPO.

Of the total size, 60% of the portion will be allotted to qualified institutional buyers (QIBs), while 15% of the size will be kept for non-institutional investors (NII), and the rest of the 35% will be reserved for the retail category.

LG Electronics is a market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume for the six months ending June 30, 2024, as per the Redseer Report. Additionally, we have been the number one player in this industry for 13 consecutive years (CY2011 to CY2023) as per the value market share in the offline channel in India, as noted in the Redseer Report.

Also, the company is among the market leaders in India across multiple product categories including washing machines, refrigerators, panel televisions, inverter air conditioners, and microwaves, based on the value market share in the offline channel (which is approximately 80% of the major home appliances and consumer electronics market (excluding mobile phones) in India in terms of value in the same period) for the six months ending June 30, 2024, according to the Redseer Report.

LG Electronics intends to increase the percentage of raw materials sourced from domestic suppliers, which was 45.08% in Fiscal 2022, 50.48% in Fiscal 2023, 48.82% in Fiscal 2024, and 58.29% in the three months ended June 30, 2024.

Demand for home appliances and consumer electronics is expected to grow from approximately Rs 6,360 billion in the six months ended June 30, 2024 (annualized) to approximately Rs 10,060 billion in CY2028, according to the Redseer Report.

In the home appliances and consumer electronics segment, LG believes that its leading market standing, pan-India network, strong brand and high-quality products, positions us well to continue tapping these opportunities. Also, the company plans to further strengthen its supply chain to bring higher efficiency and optimization, as per the draft.