LG Electronics to sell 15% of Indian arm before IPO

An LG logo flag hangs outside the company's headquarters in western Seoul. (Newsis)

LG Electronics said Tuesday that its board has approved the sale of a 15 percent stake in its Indian subsidiary, paving the way for an initial public offering on the Indian stock market as early as next month.

In a regulatory filing, the home appliance maker stated that it will dispose of 101.82 million shares in LG Electronics India, representing about 15 percent of its holdings.

The company has yet to disclose the exact pricing and disposal date, but confirmed it would submit a final prospectus to the Securities and Exchange Board of India. The offer price band and listing timetable will be announced following SEBI’s final clearance.

The Korean firm initiated the listing process in December last year by filing a draft red herring prospectus. SEBI granted in-principle approval for the IPO in March.

“Although market watchers initially expected the IPO in the first half of this year, we opted for a more cautious approach due to heightened volatility in global financial markets, including Indian exchanges, around late April,” an LG Electronics official said.

The listing will be conducted entirely through an offer-for-sale, meaning no new shares will be issued. Proceeds from the transaction — expected to be remitted directly to LG’s headquarters in Seoul — will help strengthen the company’s financial position without incurring additional debt or interest costs.

According to Indian media reports, the offering is estimated at around 115 billion rupees ($1.28 billion), exceeding LG Electronics’ standalone cash and cash equivalents of 1.1 trillion won ($780 million) as of the second quarter.

Analysts have welcomed the move, citing its likely balance sheet benefits. “Although the fourth quarter is typically a low-demand season, the Indian unit’s IPO is expected to provide meaningful improvements to LG’s cash flow,” said IBK Securities analysts Kim Woon-ho and Kang Min-goo.

Global ratings agency Moody’s has also flagged the IPO as a potential credit-positive event. In a February report, it projected the Indian listing would reinforce LG’s financial metrics and bolster its credit profile.