LG India cuts valuation, trims IPO size to 10,000 crore from Rs 15,000 crore

NEW DELHI: LG Electronics India is looking to list on Indian bourses by middle of next month, with the company (the domestic arm of Korean global major LG Inc) understood to have re-valued its operations at around 20% lower to the peak of Rs 1 lakh crore that it had assessed earlier, banking sources have said.

Also, the company may now sell around 10% of its equity in public offering against earlier plan for a 15% dilution, sources said. This would mean size of IPO may now be around Rs 10,000 crore against Rs 15,000 crore planned earlier.

The sources told TOI that the company decided to opt for a lower valuation to factor in some of the corrections in Indian market since its last financial assessment. "A lot of critical factors are behind the re-valuation, and these include the current geopolitical tensions and possible impact of the US tariffs," sources said.

The IPO will be a full offer for sale by its Korean parent and the Indian company will not receive any money from this offer. Questions sent to LG India did not get any response. Sources said the company had delayed its public float in view of the volatility in local stock market.

LG's IPO comes after Korean carmaker Hyundai's Indian arm got listed on the bourses in Oct 2024 through a Rs 27,870-crore IPO.

As per the draft offer document filed by the company earlier, 35% of the offer will be reserved for retail investors, while 50% will be reserved for the institutional investors and the balance 15% will be marked for non-institutional investors (high net worth investors).

In India, LG, which set up its business in the country about 27 years ago, is one of the leading white goods companies with a strong presence in categories like washing machines, refrigerators, panel televisions, inverter air conditioners and microwaves.

It's been the number one player in this industry for 13 consecutive years (from 2011 to 2023) as per the value market share in the offline channel in India, a report by Redseer showed. Morgan Stanley India, Axis Capital, J P Morgan India, BofA Securities India and Citigroup Global Markets India are the lead managers to the LG Electronics offer.