LG Electronics' India subsidiary said on the 14th that it was newly listed on India's securities market. LG Electronics plans to use the India unit as a key base to strengthen its push into the Global South, which is emerging as a growth market, including Asia such as India and Indonesia, as well as Latin America, the Middle East, and Africa. LG Electronics said it will use the funds raised through the listing for investments to secure growth engines and to enhance shareholder value.
On the 14th (local time), LG Electronics held a listing ceremony for its India unit at the National Stock Exchange (NSE) in Mumbai, India, with top management including CEO Cho Joo-wan, CFO Kim Chang-tae, India subsidiary head Jeon Hong-joo, and India subsidiary board chair Song Dae-hyun, as well as local investors and analysts, in attendance.
Earlier, LG Electronics disposed of 101,815,859 shares, equivalent to 15% of the India unit's issued shares, through a secondary offering. The offering price for LG Electronics' India subsidiary was set at 1,140 rupees per share (about 18,000 won), the top end of the indicated price band, and the share allotment subscription drew the largest amount of funds since 2008 in the history of Indian initial public offerings (IPO), recording a competition rate 54 times the number of shares offered, reflecting strong interest from local investors. Based on the offering price, LG Electronics' India subsidiary was valued at more than 12 trillion won.
LG Electronics will raise 1.8 trillion won in cash domestically from India's capital market. A large amount of cash flowed in without affecting financing costs or the borrowing fund ratio. LG Electronics plans to use the raised funds to secure growth engines and enhance shareholder value.
Through this listing, LG Electronics' India subsidiary plans to identify business opportunities that leverage the advantages of a localized corporations model. According to Boston Consulting Group, the share of middle-income households in India with an average annual income between $6,000 and $36,000 is expected to rise from 29% in 2020 to 46% by 2030.
CEO Cho Joo-wan said, "With this listing, India will emerge as a base country playing a central role in LG Electronics' Global South strategy," adding, "We will accelerate the growth of both LG Electronics and the India subsidiary at the same time."
LG Electronics unveiled a specialized home appliance lineup planned for Indian customers on the day. The "national appliances of India" announced that day were developed based on an analysis of Indian customers, featuring convenience functions tailored to local conditions, designs that reflect Indian culture, care services, and prices set with purchasing power in mind. This is the first time LG Electronics has introduced a locally specialized lineup in its non-premium, general product range.
LG Electronics said it designed the appliances anew from scratch, based on the home appliance know-how it has built up in the Indian market over the past 28 years and interviews with more than 1,000 customers across India. Considering the preferences of Indian customers who favor ornate designs, LG Electronics applied a sparkling floral design to the exterior and further segmented product lineups and prices by model to reduce the burden of purchasing appliances, which are essential goods.
Starting next month, LG Electronics plans to roll out a total of four specialized home appliance lineups—refrigerators, washing machines, air conditioners, and microwave ovens—sequentially in the Indian market. The specialized appliances will be produced entirely at the local production bases in Noida and Pune.
LG Electronics also plans to strengthen its local production capacity. In addition to its existing Noida and Pune plants, it is building a new plant in the Sricity area with a $600 million investment. The Sricity plant is expected to create about 2,000 direct and indirect jobs in the local community. Including the new plant, annual production capacity in India will increase to ▲ 3.6 million refrigerators ▲ 3.75 million washing machines ▲ 4.7 million air conditioners ▲ 2 million air-conditioner compressors ▲ 2 million TVs.
It will also expand its role as a global hub R&D base. LG Electronics operates a software research lab in Bengaluru, known as India's Silicon Valley. The India software research lab will be developed into a next-generation technology center focusing on AI, system-on-chip (SoC), and platforms through continued investment. LG Electronics also operates a product lab in Noida, where its production base is located.