LG Electronics to Raise $1.5 Billion in IPO, Valuing Indian Subsidiary at $15 Billion

Company’s move to launch IPO in India aims to fund expansion and shareholder returns

LG Electronics is officially moving ahead with plans to list its Indian subsidiary in an initial public offering (IPO) that is set to raise up to $1.5 billion. The IPO is expected to value the company at $15 billion, with the funds primarily directed toward strategic acquisitions and boosting shareholder returns. This public offering, which involves a secondary sale of shares rather than the issuance of new equity, reflects LG Electronics' ongoing efforts to restructure and enhance its market presence.

The planned IPO will offer 15% of LG India’s shares, and the company will not issue any new stock. Instead, the capital raised will come from the liquidation of part of its existing ownership in the subsidiary. The funds, once raised, will be allocated exclusively to LG Electronics’ headquarters and used for its global strategic objectives, primarily focusing on mergers and acquisitions. These initiatives are expected to further strengthen the company’s position in key sectors like artificial intelligence (AI) home solutions, media content, automotive electronics, and heating, ventilation, and air conditioning (HVAC) systems.

Financial heavyweights such as Axis Capital, Bank of America, Citigroup, JPMorgan Chase, and Morgan Stanley are set to act as underwriters for the IPO, helping to ensure a smooth listing process. The offering is slated to be one of the largest IPOs by a foreign company in India, showcasing the rising demand for consumer electronics and technology stocks in the rapidly growing Indian market.

The capital generated through this IPO will play a crucial role in advancing LG Electronics’ long-term strategic goals. LG is prioritizing investments to grow in industries with strong potential for future growth, such as AI-powered smart home solutions, innovative automotive technologies, and energy-efficient HVAC systems. This move comes after a major operational restructuring, which was designed to better align the company’s business with global technology trends.

In addition to its focus on expanding into these key sectors, LG Electronics has launched a “value-up” program aimed at achieving sustainable growth in the long term. As part of this program, the company has set ambitious goals to achieve a 7% average annual growth rate and an operating profit margin of 7%. LG also plans to reach a 7x multiple on EV/EBITDA by 2030. Moreover, the company aims to achieve a consolidated revenue target of 100 trillion KRW (approximately $78 billion), excluding its subsidiary LG Innotek, by the same year.

To further boost investor confidence, LG has committed to returning at least 25% of its net profit (excluding one-time, non-recurring gains) to shareholders. This initiative reflects the company's dedication to enhancing shareholder value while pursuing strategic growth and innovation.

With the Indian IPO, LG Electronics is positioning itself to tap into the growing demand for consumer electronics and technology solutions in India, a market with tremendous potential. This listing not only highlights LG's confidence in the future of the Indian market but also underscores its broader strategy to lead in sectors where technology and sustainability intersect.

By opting for a secondary sale of shares, LG Electronics can maintain control over its operations while unlocking valuable capital for its global expansion efforts. As the IPO moves forward, investors and analysts alike will be closely monitoring the listing, which is expected to be a pivotal moment in the company’s ongoing transformation and growth strategy.