LG Electronics considers an IPO in India to pursue its $75 billion target

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LG Electronics Inc. is considering an initial public offering (IPO) for its Indian operations as part of its broader strategy to rejuvenate its consumer electronics division and reach its ambitious $75 billion revenue target by 2030. CEO William Cho has highlighted this potential IPO as one of several strategies to bolster the company's performance in the competitive electronics market.

Cho, who has led LG since 2021, indicated that the company is exploring various avenues to drive growth, with the Indian market being a focal point. This marks the first time LG has publicly discussed the prospect of an IPO in India amidst ongoing speculation. Cho's goal is to significantly increase the company's revenue from electronics, aiming for 100 trillion won ($75 billion) annually by the end of the decade. This is a substantial jump from the projected $65 billion in total sales for 2023.

In India, LG's operations have shown robust growth, with revenue rising 14% to a record 2.87 trillion won in the first half of the year, and net income increasing by 27% to 198.2 billion won. The company plans to capitalize on the thriving Indian stock market, which is currently one of the most active global markets with numerous IPOs anticipated this year. Competitors like Hyundai Motor Co. are also preparing significant IPOs in India, underscoring the market's attractiveness.

Cho has noted that LG is closely monitoring the Indian IPO landscape and has not yet determined potential valuations for its Indian operations. He remains cautious, stating, "It is one of many options we can consider" and acknowledging the growing interest from global investors.

In addition to exploring IPOs, LG is focusing on expanding its business in other areas. Cho plans to foster the growth of new ventures, including HVAC systems, which are seeing increased demand due to the rise of AI data centers. LG's chiller sales have surged by 40% annually over the past three years. The company is also enhancing its subscription service for home appliances, which allows customers to rent products like washing machines and laptops. This model is expanding from Korea to other markets, including Malaysia, Thailand, Taiwan, and India, with future plans for the US and Europe. LG expects revenue from this service to grow by 60%, reaching about $1.3 billion in 2024.

Moreover, LG is investing heavily in expanding its free, ad-supported streaming services. Cho announced a $1 trillion investment by 2027 to bolster its webOS-based advertising and content business. His experience with LG across various international markets underscores his commitment to understanding customer needs and developing innovative business models.

Overall, LG's multifaceted strategy, including potential IPOs, new business ventures, and subscription services, reflects its ambition to strengthen its position in the global electronics market.