LG Electronics India Secures SEBI Approval for IPO, Plans Fundraising via Offer for Sale
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Synopsis
LG Electronics India Limited has received SEBI's approval to proceed with its IPO, which aims to raise approximately Rs 15,000 crore through an offer for sale, allowing its parent company to divest equity shares.
Key Takeaways
- SEBI Approval: LG Electronics India receives SEBI nod for IPO.
- IPO Size: Expected to raise around Rs 15,000 crore.
- OFS Structure: Entirely an Offer for Sale with no new capital.
- Market Leadership: Maintains top position in offline sales for 13 years.
- Financial Growth: Revenue and profit after tax show significant growth.
New Delhi, March 18 (NationPress) LG Electronics India Limited has officially received the green light from the Securities and Exchange Board of India (SEBI) to initiate its initial public offering (IPO), which is projected to reach approximately Rs 15,000 crore.
This company, which operates as a wholly-owned subsidiary of the renowned South Korean conglomerate LG Electronics Inc., submitted its draft red herring prospectus (DRHP) to SEBI on December 6, 2024.
With the regulator's final observation in hand, the company is now set to move forward with the offering, as stated in its announcement.
The forthcoming IPO will consist entirely of an offer for sale (OFS), wherein LG Electronics Inc. will divest up to 10.18 crore equity shares.
Each share carries a face value of Rs 10. This implies that the IPO will not generate new capital for the company; instead, it will enable the parent firm to reduce its stake.
Although the company has not disclosed the complete issue size, reports suggest that it is estimated at around Rs 15,000 crore.
The IPO will be overseen by a consortium of investment banks including Morgan Stanley India, JP Morgan India, Axis Capital, BofA Securities India, and Citigroup Global Markets India. KFin Technologies will act as the registrar for the offering.
As a formidable entity in the Indian home appliances and consumer electronics sector, LG Electronics India has consistently dominated the market.
According to a report by Redseer, referenced in the DRHP, the company has retained its status as the market leader in offline sales by value for an impressive 13 consecutive years, from 2011 to 2023.
Financially, LG Electronics India has outperformed many listed competitors. In the fiscal year 2024, the company recorded a revenue of Rs 21,352 crore, up from Rs 19,868.24 crore the previous year.
Its profit after tax also experienced a rise of 12.35 percent, reaching Rs 1,511.07 crore from Rs 1,344.93 crore. For the quarter ending June 30, 2024, the company reported a revenue of Rs 6,408.80 crore and a profit after tax of Rs 679.65 crore.
In comparison, Hyundai Motor India made headlines with its Rs 27,870.16 crore public offering last year, which stands as India's largest public offering to date.
The subscription window for that IPO was open from October 15 to October 17, with a price band set between Rs 1,865 and Rs 1,960 per share.
This IPO was also entirely an offer for sale (OFS) of 14.22 crore shares, with no fresh issue component.
