To reach its goal of $75 billion in electronics sales by 2030, LG Electronics Inc. is thinking about going public with its India division, capitalising on the country’s thriving stock market.
Reviving a decades-old consumer electronics firm is a priority for Chief Executive Officer William Cho, and one of the options being considered is a debut in the Indian market. This is the first time the South Korean company, which fiercely rivals bigger rival Samsung Electronics Co., has discussed in public its planned debut in India, a move that has long been the subject of market and media rumours.
After working for the family-owned LG Group for more than 30 years, Cho rose to the top position in 2021. By 2030, he wants to increase the electronics division to generate 100 trillion won ($75 billion) in revenue annually. That compares to an estimated $65 billion in total business revenue in 2023. A portion of its goal is to increase revenue from corporate clients; by the end of the decade, it wants to receive roughly 45% of revenues from other businesses, up from 35% currently.
“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.”
LG aims to maintain steady growth in India. Revenue at LG’s unit in the Asian nation increased by 14% to a record 2.87 trillion won in the first half of this year, while net income increased by 27% to 198.2 billion won.
Any IPO would take place when India’s capital markets were expanding. This year, more than 200 companies raised $7.1 billion through initial public offerings (IPOs), making it one of the busiest markets in this sector. As domestic money drives companies to consider listing, at least 30 initial public offerings (IPOs) have entered the pipeline. Bloomberg News revealed last month that Korean competitor Hyundai Motor Co. is getting ready to raise as much as $3.5 billion through an Indian IPO.
“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.
The 61-year-old Cho intends to support startup companies with the potential to generate over 1 trillion won in sales annually. Among these are HVAC systems, for which the business operates 11 production facilities worldwide. Large building air conditioners known as chillers are becoming essential for artificial intelligence data centres, which are proliferating globally as businesses seek generative AI. The average yearly growth in foreign sales of LG’s chillers over the last three years has been 40%.
LG is also growing its home appliance subscription service. In Korea, customers can rent electronics like computers and washing machines for three to six years in exchange for a monthly payment. Theoretically, that enhances convenience and affordability: According to Cho, about 35% of customers currently choose subscriptions. The business just started selling subscriptions in Malaysia, and it intends to expand that business model to clients in Thailand, Taiwan, and India this year as well as maybe the US and Europe later on. In 2024, LG projects a 60% increase in subscription revenue, or almost $1.3 billion.
Additionally, the business intends to grow its selection of free, ad-supported streaming services. Cho stated that LG plans to invest one trillion won by 2027 to expand its webOS-based content and advertising 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.
