LG Electronics, the South Korean white goods maker, has reportedly picked investment banks for a likely initial public offering (IPO) of its Indian arm. The float could mobilise around $1.5 billion.
A Bloomberg report said that LG has tapped banks, including Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co. and Morgan Stanley as arrangers for an IPO that may take place as early as next year.
The share sale could give LG Electronics India Pvt Ltd a valuation of about $13 billion.
While the size of the IPO and its timing could still change, the company could file a draft prospectus with the Securities and Exchange Board of India (Sebi) as early as next month, the report added.
The IPO of its Indian subsidiary is one of the options the company is considering as it looks to hit a target of $75 billion in electronics revenue by 2030 and bump up its consumer electronics business, chief executive officer William Cho said in a Bloomberg Television interview in August.
LG’s move comes after another South Korean firm Hyundai Motor India Ltd (HMIL) filed its draft red herring prospectus with the market regulator in June this year.
The proposed IPO is entirely an offer for sale (OFS) of 142,194,700 equity shares by Hyundai Motor Company (HMC).
While proceeds of the issue will go to the parent, it is looking to raise at least $3 billion (₹25,000 crore) from the IPO. If this happens, it would be the largest, overtaking that of Life Insurance Corporation (LIC) which had come out with a ₹22,000 crore float in May 2022.
According to its DRHP, the company is now taking various initiatives, which involve an aggregate investment commitment of ₹32,000 crore.
