Around two months have passed since South Korean automobile giant Hyundai’s India unit raised around USD 3.3 billion in what was the biggest initial public offering to date in the country. Now, the local arm of another South Korean giant is getting ready to go public.
LG Electronics India’s Korean parent will sell 101.8 million shares in the maker of TVs, washing machines and air-conditioners among other consumer durables. The share sale will amount to 15 per cent of the post-offer paid-up equity share capital of LG Electronics India, according to the company’s draft red herring prospectus.
The issue size is estimated to be around USD 1.8 billion (around Rs 15,200 crore), according to some reports.
What’s worth noting is that this will be a complete offer for sale, and the parent, LG Electronics, will get all the proceeds.
“Our company will not receive any proceeds from the offer, and all the offer proceeds will be received by the selling shareholder after deduction of offer-related expenses and relevant taxes thereon, to be borne by the selling shareholder,” LG Electronics India said in its IPO filing.
The company is one of the largest appliance makers, competing with Korean rival Samsung, Japan’s Panasonic US company Whirpool and homegrown Voltas, among others. In the year ended March 2024, LG Electronics India reported a net profit of Rs 1,511 crore on revenue of Rs 21,352 crore in the year ended March 2024.
LG Electronics and Hyundai are two of the several large companies that have gone public in what has been a red-hot IPO market in India in 2024.
According to data from S&P Global Market Intelligence, 298 companies have listed on India’s stock exchanges in 2024 as of December 3, cumulatively raising Rs 1.40 lakh crore.
The total number of IPOs this year is almost 23 per cent higher than 2023, when there were 243 listings. Fundraising volumes, meanwhile, have surged 139 per cent from last year’s Rs 58,827 crore, as per S&P Market Intelligence data.
Softbank-backed food delivery and quick commerce platform Swiggy, state-owned NTPC’s renewable energy arm NTPC Green, private sector mortgage lender Bajaj Housing Finance, electric scooter maker Ola Electric and telecom service provider Bharti Hexacom have been among the big public issues this year.
Swiggy raised Rs 11,327 crore in November. NTPC Green Energy raised Rs 10,000 crore in the same month. Earlier, Bajaj Housing Finance raised Rs 6,560 crore in September, and Ola Electric raised Rs 6,146 crore in August. Bharti Hexacom raised Rs 4,275 crore going public in April.
India’s economy has been among the fastest growing, with S&P Global Ratings estimating 6.8 per cent growth in the year ending March 2025. Stock market indices, too, hit a record high in September. Several public issues saw huge investor interest. The surge in IPOs echoed all this.
However, the GDP growth sharply slowed to 5.4 per cent in the July-September quarter, prompting the Reserve Bank of India to revise its GDP growth forecasts for 2024-25 to 6.6 per cent from 7.2 per cent. Markets, too, saw a correction phase amid a sell-off by foreign institutional investors in October and November.
The expectation is that the economy will rebound in the second half of the financial year, with government spending expected to pick up and the elections out of the way.
Finance Minister Nirmala Sitharaman said on Friday that the third quarter GDP growth numbers would make up for the loss in the second quarter.
Analysts expect 2025 could be another strong year for IPOs in India. As of November 29, around 85 companies were at various stages of the listing process, of which 40 have already received approval to go public, data compiled by S&P Market Intelligence showed.