LG Electronics India, the Indian arm of South Korean major LG Electronics, has started conducting roadshows to meet potential investors for its initial public offering (IPO), according to two sources.
“As the company is planning to launch the IPO this year itself, it wants to chalk out details soon,” one of the sources said.
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The company filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India last year. According to the DRHP, the public issue will entirely be an offer for sale, with the South Korean parent selling its 15% stake, or 101.8 million equity shares of a face value of Rs 10 each.
“It is likely to raise around $1.5 billion (around Rs 13,000 crore) at a valuation of $15 billion,” another source said. This would make the IPO one of the biggest public issues in India.
According to the draft papers, merchant bankers for the issue are – Morgan Stanley India Company, JP Morgan India, Axis Capital, BofA Securities India and Citigroup Global Markets India.
In response to FE’s query, a spokesperson of the company said, “LG Electronics India has put out a Draft Red Herring Prospectus (DRHP) that has been shared with the Securities and Exchange Board of India (SEBI) and is currently under review. We will not be able to comment beyond this.”
In October, Hyundai Motors Company listed its India arm – it became the country’s largest-ever IPO with a size of $3.3 billion (around Rs 27,000 crore).
LG Electronics India is a leading player in home appliances and consumer electronics. It serves both B2C and B2B customers. It primarily competes with Whirlpool of India and Samsung’s India arm.
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In its DRHP, LG said it is planning to roll out an appliance rental service across the country. This service was piloted at its exclusive stores last year, mainly to target premium customers. “We plan to roll this out across our distribution network, which, we believe, will enable us to offer differentiated services, enhance consumer satisfaction and drive sales,” the company said.
It is also setting up a new factory,
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