LG Electronics is moving full steam ahead with plans to take its Indian unit public, adding Axis Capital Ltd. to its list of financial partners for the upcoming Initial Public Offering (IPO).
Sources familiar with the developments have indicated that the South Korean giant is accelerating efforts for a major share sale in Mumbai, marking a significant milestone in the company’s strategic expansion in India, according to a Bloomberg report.
This move follows reports from September that LG had already enlisted central international banks, including Bank of America, Citigroup, JPMorgan Chase & Co., and Morgan Stanley. By adding Axis Capital, LG is strengthening its team of arrangers and laying the groundwork for what could be one of the more prominent IPOs in the region next year.
While LG Electronics and Axis Capital have remained tight-lipped, insiders suggest the share sale could raise between $1 billion and $1.5 billion, pushing LG Electronics India Pvt Ltd.’s valuation to a hefty $13 billion.
India’s capital market has been on fire, attracting global brands and investors eager to ride the country’s robust economic growth wave. According to Bloomberg data, this year alone, approximately $49 billion has been raised through IPOs and secondary share sales, accounting for nearly a third of all equity capital raised across Asia.
The massive $3.3 billion IPO by Hyundai Motor India Ltd. in October is the perfect example. It not only broke records but also demonstrated the country’s thriving appetite for investment in blue-chip companies.
LG’s push for an IPO in India is more than a fundraising exercise. Like many international corporations, LG sees immense potential in the country’s rapidly expanding market.
The IPO is a strategic play to solidify its position in one of the world’s fastest-growing economies, aligning with the broader trend of global businesses establishing deeper roots in India. The appeal lies in the booming consumer market and the favorable regulatory environment, which has become increasingly attractive for foreign investment.
Hyundai’s case serves as a testament to this. Its blockbuster IPO was oversubscribed 2.28 times, driven largely by institutional investors eager to capitalize on India’s economic trajectory. LG’s plans come amid similar enthusiasm, as companies like Swiggy Ltd., HDB Financial Services Ltd., and Carraro SpA also eye the Indian market for fresh capital and growth.
As LG gears up for what could be a significant financial event, the anticipation underscores India’s growing influence on the global economic stage.
With heavyweights like LG betting on its future, the Indian stock market is set to witness an exciting period brimming with high-profile listings and international attention. For LG, this IPO isn’t just about financial gains; it’s a strategic move to reinforce its brand and tap into the immense potential of India’s evolving market landscape.
