Announcement of Local Stake Sale in Indian Subsidiary
Targeting Localized Products Since 1997
Positioning India as a Core Hub for the Global South
On October 14, LG Electronics listed its Indian subsidiary on the Indian stock exchange. This marks the company's first attempt to channel 28 years of achievements in the Indian market back into its headquarters as growth capital. It is significant in that it establishes a virtuous cycle, reinvesting profits earned locally into further global expansion. This move is expected to serve as a strategic turning point, shifting the company's business focus away from the United States and China and positioning emerging markets as a new axis of growth.
On this day, LG Electronics announced that it had sold a 15% stake (101,815,859 shares) in its Indian subsidiary, LG Electronics India Limited, to institutional investors and others. The sale price was finalized at 1.8567 trillion won, and stock trading on the Indian stock exchange begins today. The sale was conducted by selling existing shares without issuing new ones. Through this listing, LG Electronics will channel the funds secured locally back to its headquarters to be used as resources for future global investments.
The response from the Indian financial market was enthusiastic. During the initial public offering (IPO) subscription period from October 7 to 9, a total of 443 billion rupees (approximately 70.8 trillion won) was subscribed, resulting in a competition rate of 54 to 1. Local analysts attributed this to the combination of trust in the global LG brand and the growth potential within India. With this listing, LG Electronics achieved a valuation about 40 times higher than its book value, successfully leading to a re-evaluation of the value of its overseas subsidiaries.
LG Electronics entered the Indian market in 1997 by establishing its first subsidiary in Noida. Over the past 28 years, the company has built a comprehensive business structure in India, encompassing production, sales, service, and research and development. By maintaining the number one market share in key home appliance categories such as refrigerators, washing machines, air conditioners, and TVs, LG Electronics has established itself locally as a "premium national brand."
In particular, LG Electronics has enhanced its brand competitiveness through localization strategies that take into account India's unique climate, culture, and power infrastructure. Examples include refrigerators that keep cool for up to seven hours during power outages, air conditioners equipped with ultrasonic mosquito-repellent functions, convertible refrigerators for the vegetarian population, and washing machines with a special mode for washing traditional Indian sarees.
Customer-centric service networks are also cited as a key strength of LG Electronics. The company operates 16 regional offices, 777 branded shops, 23 distribution centers, and employs over 12,000 service engineers across India. By directly managing the entire process from installation to repair, LG Electronics has strengthened brand trust among consumers.
The company has also been steadily expanding its production infrastructure. Following Noida and Pune, LG Electronics is building its third home appliance factory in Sri City, Andhra Pradesh, in southern India, investing 600 million dollars (about 840 billion won). According to Boston Consulting Group (BCG), the proportion of India's middle class is expected to expand to 46% by 2030.
With this Indian listing, LG Electronics plans to establish India as a core hub of its "Global South" strategy. The funds raised will be invested not only in home appliances but also in new growth businesses such as vehicle components (automotive electrical and electronic systems), robotics, and artificial intelligence (AI) appliances.
A company representative stated, "Looking at the recently announced third-quarter results, the vehicle component division continued its growth and exceeded market expectations," adding, "The Indian listing will be an important opportunity to expand LG Electronics' global business portfolio."
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