LG Electronics India has received approval from markets regulator Securities and Exchange Board of India (SEBI) for its IPO, according to sources. The IPO size is likely to be around Rs 15,000 crore.
The company had filed the draft red herring prospectus (DRHP) with SEBI in the first week of December.
It is likely to be the country’s fifth-largest IPO after Life Insurance Corporation, Hyundai Motor India, Paytm and Coal India.
ALSO READWhy is Max Financial CLSA’s top pick in Life Insurance sector? 4 reasons are…
The company did not respond to queries sent by FE till the time of going to the press.
The IPO will be entirely an offer for sale (OFS) of 101.8 million equity shares by the parent firm with face value of Rs 10 each, with no fresh issue component, according to the DRHP.
Post the issue, the shareholding of parent LG Electronics will be diluted by 15% to 576.9 million shares. The automaker had conducted roadshows in February to meet potential investors.
In the prospectus, LG said it is also 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, its third in India, in Andhra Pradesh. It currently has plants in UP’s Greater Noida and Maharashtra’s Ranjangaon. The company had entered the Indian market in 1997. It competes with Whirlpool of India and Samsung’s India arm.
According to the company, the appliances and electronics market is expected to reach Rs 10 lakh crore (around $120 billion) by 2028 in India, driven by various growth tailwinds.
Markets end lower ahead of Holi: Nifty below 22,400, Sensex slips 200 points
The last five years have seen the appliances and electronics market grow at around 7%, and this is expected to accelerate to around 12% in the next five years.
This would also be second South Korean major to list in India in less than six months.
» Read More
