LG Electronics India makes debut on Indian stock market

LG Electronics CEO Cho Joo-wan, left, poses with National Stock Exchange of India (NSE) CEO Ashish Chauhan after striking the ceremonial bell signalling LG Electronics India's stock market debut at the NSE in Mumbai, Tuesday (local time). Courtesy of LG Electronics

LG Electronics India (LGEI) began trading on the local stock market Tuesday (local time), with the listing bringing in 1.8 trillion won ($1.26 billion) in proceeds for its headquarters.

LG Electronics headquarters renewed its commitment to the Indian market, announcing the company's “Make for India” vision and showcasing four new home appliances tailored to local lifestyles.

The company said it held a listing ceremony for LG Electronics India (LGEI) at the National Stock Exchange of India (NSE) in Mumbai, attended by LG Electronics CEO Cho Joo-wan, Chief Financial Officer Kim Chang-tae, LGEI Managing Director Jeon Hong-ju and other top executives. Cho and NSE CEO Ashish Chauhan struck the ceremonial bell at 10 a.m. to mark the start of trading for LGEI.

For the listing, LG Electronics unloaded a 15 percent stake, or 101.8 million shares, in LGEI in an offer for sale at 1,140 rupees per share, which was the top end of the subscription price band. The subscription drew the largest amount of funds in India’s initial public offering market since 2008, with bids totaling 54 times the shares on offer.

Within thirty minutes of its debut, the stock price surged by 45 percent to hover around 1,600 rupees.

Based on the offering price, LGEI’s market capitalization was valued at over 12 trillion won. The 1.8 trillion won in proceeds flowed directly to LG Electronics’ headquarters, significantly improving its financial soundness.

The company said it plans to use the funds to secure new growth engines through investments in future businesses, while enhancing its corporate and shareholder value. A day earlier, LG Electronics estimated its third-quarter operating profit at 688.9 billion won, down 8.4 percent year-on-year.

“With the listing, India will step up as a hub country, playing a pivotal role in LG Electronics’ Global South strategy,” Cho said. “We will accelerate the growth of both LG Electronics and LGEI.”

LG Electronics CEO Cho Joo-wan, ninth from left, and National Stock Exchange of India CEO Ashish Chauhan, 10th from left, pose with LG Electronics India executives during the company's listing ceremony at NSE in Mumbai, Tuesday (local time). Courtesy of LG Electronics

LG Electronics said it plans to explore new business opportunities in the Indian market to capitalize on the region’s high growth potential. According to Boston Consulting Group, middle-income households in India have an annual income ranging between $6,000 and $36,000, and are projected to account for 46 percent of the population by 2030, up from 29 percent in 2020.

Renewing LG Electronics’ commitment in the Indian market, Cho announced the company's vision of “Make for India,” “Make in India” and “Make India global.”

The “Make for India” strategy is aimed at expanding tailored strategies, such as introducing products that cater to the tastes and lifestyles of Indian consumers.

As part of the strategy, LG Electronics on Tuesday showcased a new lineup of four home appliances — refrigerators, washers, air conditioners and microwave ovens — tailored to Indian consumers. The products will be rolled out starting in November, all manufactured at the company’s production bases in Noida and Pune.

For its “Make in India” strategy, LG Electronics promised to align with the Indian government’s initiative to spur the local manufacturing industry by advancing its local value chain spans from R&D, sales and service, so that LGEI can be a partner for India’s economic growth.

Since its entry into the Indian market in 1997, LG Electronics worked on building a fully localized business ecosystem. In addition to its existing plants in Noida and Pune, the company is investing $600 million to build a new factory in Sri City, which is expected to create around 2,000 direct and indirect jobs in the region.

Once the new plant is completed, LG Electronics’ annual production capacity in India will expand to 3.6 million refrigerators, 3.75 million washing machines, 4.7 million air conditioners, 2 million air conditioner compressors and 2 million TVs.

The company also pledged to expand LGEI’s role as a research and development base. LG Electronics currently operates a software lab in Bengaluru and plans to increase investment in the facility to focus on artificial intelligence, system-on-chip, platform development and other advanced technologies.

The “Make India global” strategy centers on positioning India as a hub country for LG Electronics’ growth strategy in the region, and growing together with India as a trusted partner in its rise to the global stage.

“Through these strategies, LG Electronics will further expand initiatives tailored to India, a country of 1.4 billion people with immense growth potential,” the company said. “We aim to go beyond our current position as the No. 1 brand in market share and take a new leap forward as the nation’s most trusted corporate brand.”