LG Electronics mulls Indian IPO to meet $75 billion target

Executive Director William Cho said an Indian market debut It is one of several options it is considering to revive a decades-old consumer electronics business. It is the first time the South Korean company, which competes directly with its larger rival, Samsung Electronics Co., has spoken publicly about an Indian debut, the subject of persistent speculation in the market and media.

Cho, who rose to the top job in 2021 after more than three decades with the family-owned LG Group flagship, has set a goal of growing the electronics business to annual revenue of 100 trillion won ($75 billion) by 2030. That’s up from overall company revenue of about $65 billion in 2023. He aims to get to that point in part by winning more from enterprise customers, aiming for about 45% of sales to come from other companies by the end of the decade, up from 35% now.

“It’s one of many options we can consider,” Cho told Bloomberg Television. “I understand there is growing interest among global investors,” he said, referring to a possible IPO in India. “As of now, there’s nothing confirmed.”

In India, LG is looking to maintain rapid growth. In the first six months of this year, revenue from LG’s Indian unit rose 14% to a record 2.87 trillion won, while net profit climbed 27% to 198.2 billion won. Any IPO would coincide with a boom in India’s capital markets. Some 189 companies are looking to sell shares to raise $5.6 billion this year, making it one of the most active markets in this space. At least 30 IPOs have joined the process as domestic money-fueled demand pushes companies to explore listings. Korean peer Hyundai Motor Co. is preparing to raise as much as $3.5 billion in an Indian IPO, Bloomberg News reported this month. “We have been watching closely what is happening in the Indian market in terms of IPOs and following similar industry cases and similar IPOs,” Cho said. LG has not yet calculated possible valuations for its Indian unit, it added.

Cho, 61, plans to push for new businesses that can generate more than 1 trillion won in annual revenue each. These include heating, ventilation and air conditioning, for which the company has 11 production plants around the world. Chillers — large air conditioners for buildings — have become key to artificial intelligence data centers, which are popping up around the world as companies look to generative AI. Over the past three years, overseas sales of LG’s chillers have grown 40 percent annually, on average.

LG is also expanding its subscription service for home appliances. In Korea, consumers can rent products such as washing machines and laptops for three to six years by paying a monthly fee. In theory, that improves affordability and convenience: About 35% of consumers now opt for subscriptions, according to Cho. The company recently started offering subscriptions in Malaysia and plans to roll out the model in Thailand, Taiwan and India starting this year, and possibly the United States and Europe in the future. LG expects revenue from the subscription business to grow 60% to about $1.3 billion by 2024.

The company also plans to expand its free, ad-supported streaming services. Cho said LG will invest 1 trillion won through 2027 to grow its webOS-based content and advertising business.

“I have spent half of my career outside of Korea and it is all about understanding customers and creating new business models for them,” said Cho, who has worked with LG in North America, Germany and Australia.