Why LG India's proposed IPO has been postponed
What's the story
LG Electronics has delayed the IPO of its Indian subsidiary amid volatility in the local stock market, as per PTI. The South Korean conglomerate had initially planned to debut LG Electronics India on the bourses in mid-May, but has now decided to postpone it by at least a quarter. Industry insiders say if the market continues to be unfavorable in August, it could be delayed further.
Factors
Market uncertainties impact IPO
The market's reaction to the proposed IPO, estimated at ₹15,000 crore according to some reports, hasn't been very positive. The recent tariffs imposed by the Donald Trump administration and a terror attack in Pahalgam, Jammu & Kashmir, have added to market uncertainties. An LG Electronics spokesperson said a final decision regarding the IPO will depend on market conditions.
Status
IPO procedures underway
The spokesperson confirmed that the procedures for LG Electronics India's IPO are underway. However, no definitive plans have been confirmed as of now. The company is closely monitoring market trends and will choose a strategic time for the listing that ensures an accurate valuation of the firm. This statement underscores LG's commitment to making informed decisions based on prevailing market conditions.
IPO details
LG Electronics India filed preliminary papers with SEBI
LG Electronics India Ltd filed preliminary documents for an IPO with the Securities and Exchange Board of India (SEBI) on December 6, 2024. The parent company intends to sell more than 10.18 crore shares, a 15% stake in the firm. This proposed IPO, according to the draft red herring prospectus (DRHP), is a 100% offer for sale (OFS) of equity shares by promoter LG Electronics Inc with no new issue component.
Financial distribution
Proceeds from IPO to go to South Korean parent
As the public issue is entirely an OFS, LG Electronics India will not receive any funds from the IPO. All proceeds will be directed to its South Korean parent company.