South Korea’s LG Electronics Inc is likely to gear up for a significant initial public offering (IPO) of its Indian operations and has picked banks for the potential listing plan of its Indian unit and aims to raise as much as $1.5 billion, Bloomberg reported citing sources.
LG has tapped banks including Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Morgan Stanley as bankers for the possible listing plan that may take place next year, the report added.
LG may seek to raise $1-1.5 billion from the share sale, which could give LG Electronics India Pvt Ltd a valuation of about $13 billion, and may file a prospectus with market regulator SEBI as early as next month, as per the report.
India is the second largest market for LG Electronics globally after the US and the South Korean chaebol expects to retain its growth momentum here. Presently LG has two manufacturing units at Ranjangaon, Pune and Greater Noida.
LG Electronics India is a wholly-owned subsidiary of South Korea-based LG Electronics and is a well-established brand operating in various segments, such as consumer electronics, home appliances, HVAC and IT hardware.
Tapping the immense interest in the country’s appetite for IPOs, Hyundai Motor India (HMIL), the Indian unit of the South Korean carmaker is also gearing up for an IPO. The Gurugram-headquartered local subsidiary of Korean automaker Hyundai Motor Company (HMC) recently filed a draft red herring prospectus (DRHP) with market regulator SEBI to dilute a part of its promoter stake.
Although it has not announced any specific date for its IPO, sources indicate that HMIL, a 100 percent subsidiary of HMC, might make its market debut as early as 2025.
As per the DRHP, the company’s plan involves an offer for sale (OFS), through which the parent HMC intends to sell 142.2 million of its shares, representing 17.5 percent of HMIL. The company, which is the country’s second-largest passenger carmaker, has not disclosed the expected proceeds from the IPO. However, according to estimates by Nomura, it could fetch the Korean parent a whopping $2.5-3 billion (up to Rs 25,000 crore).
IPO market
Apart from the new public offers, the Street will also see 13 listings next week, including the marquee debut of Bajaj Housing Finance. Bajaj Housing Finance IPO, which broke all records in terms of the highest ever number of applications and demand received, is expected to make a robust debut on Dalal Street on September 16. Data available showed that shares of the company may more than double investors’ wealth on the listing.
Analysts said this flurry of activity reflects growing investor confidence and signals a vibrant capital-raising environment, underscoring India’s robust economic fundamentals.
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