LG Electronics Inc. is contemplating an initial public offering for its India business, leveraging the thriving stock market to support its ambitious goal of achieving $75 billion in electronics revenue by 2030.
According to a Bloomberg report, CEO William Cho mentioned that a debut in the Indian market is among several strategies being considered to rejuvenate the company’s decades-old consumer electronics business.
It’s the first time the South Korean company, which competes head-on with larger rival Samsung Electronics Co., has spoken publicly about an Indian debut, the subject of persistent market and media speculation, the report said.
Cho — who ascended to the top post in 2021 after more than three decades with the flagship of the family-owned LG Group — has set a goal of growing the electronics business to an annual revenue of 100 trillion won ($75 billion) by 2030. That’s versus overall company revenue of about $65 billion in 2023.
It aims to get there in part by earning more from enterprise clients — targeting about 45% of sales from other companies by the end of the decade, versus 35% now.
“It is one of many options we can consider,” Cho told Bloomberg Television. “I understand there’s increased interest among global investors,” he said, referring to a potential IPO in India. “As of now, nothing is confirmed.”
In India, LG seeks to sustain rapid growth. In the first six months of this year, revenue at LG’s unit within the Asian country rose 14% to a record 2.87 trillion won, while net income climbed 27% to 198.2 billion won.
“We have been watching carefully what’s going on in the Indian market in terms of IPOs and following similar industry and similar IPO cases,” Cho said.
LG hasn’t yet calculated possible valuations for its Indian unit, he added.
Cho, 61, plans to nurture new businesses that can each bring in more than 1 trillion won of annual revenue. Among them are heating, ventilation and air-conditioning, for which the company has 11 production sites globally.
Chillers — large air conditioners for buildings — have become key for artificial intelligence data centers, which are sprouting up across the world as companies pursue generative AI.
Over the past three years, overseas sales of LG’s chillers have grown 40% annually, on average.
LG is also expanding its subscription service for home appliances.
The company is also planning to expand its free ad-supported streaming services. Cho said LG will invest 1 trillion won by 2027 to grow its webOS-based advertising and content business.
“Half of my career was spent outside Korea, and it is about understanding customers and creating new business models for them,” said Cho, who has worked with LG in North America, Germany and Australia.
Comments
0 comment