LG Electronics Inc. is exploring the possibility of launching an initial public offering (IPO) for its India business. This move is aimed at leveraging the booming stock market to help the company reach its ambitious goal of $75 billion in electronics revenue by 2030.
CEO William Cho Discusses IPO Plans
William Cho, CEO of LG Electronics, revealed that an Indian IPO is one of several strategies the company is considering to reinvigorate its longstanding consumer electronics business. This is the first time LG, which competes directly with Samsung Electronics Co., has publicly discussed the potential for an IPO in India, a subject that has generated significant market interest.
Revenue Growth Target and Strategy
Cho, who took on the CEO role in 2021 after more than 30 years with LG, has set a target to grow the electronics business to an annual revenue of 100 trillion won (approximately $75 billion) by 2030. This goal is a significant increase from the company’s total revenue of about $65 billion in 2023. A key part of this strategy is to increase the share of revenue from enterprise clients, aiming for 45% of sales to come from other companies by the end of the decade, up from the current 35%.
India’s Growth Potential
LG is focusing on sustaining its rapid growth in India. In the first half of this year, the company’s Indian unit reported a 14% increase in revenue, reaching a record 2.87 trillion won, while net income rose by 27% to 198.2 billion won.
Booming Indian IPO Market
Any potential IPO by LG in India would coincide with a significant boom in the country’s capital markets. In 2023, approximately 189 companies are expected to raise $5.6 billion through IPOs, making India one of the busiest markets in this sector. For example, Hyundai Motor Co. is reportedly planning to raise as much as $3.5 billion through an Indian IPO.
Future Growth Areas
Looking ahead, Cho, who is 61 years old, plans to nurture new business areas, each with the potential to generate over 1 trillion won in annual revenue. One such area is the heating, ventilation, and air-conditioning (HVAC) sector, where LG operates 11 production sites globally. Large air conditioners, or chillers, have become crucial for cooling artificial intelligence data centers, and LG’s overseas sales in this area have grown by 40% annually over the past three years.
Expansion of Subscription Services
LG is also expanding its subscription services for home appliances. In South Korea, customers can rent products like washing machines and laptops for periods ranging from three to six years by paying a monthly fee.
This model improves affordability and convenience, with 35% of consumers now opting for subscriptions. LG recently introduced this service in Malaysia and plans to roll it out in Thailand, Taiwan, and India this year, with potential expansions to the US and Europe. The company expects revenue from its subscription business to grow by 60%, reaching approximately $1.3 billion in 2024.
Investment in Streaming Services
Additionally, LG plans to invest 1 trillion won by 2027 to expand its free, ad-supported streaming services. This investment will focus on growing its webOS-based advertising and content business.
CEO’s Vision and Experience
Cho, who has spent half of his career outside South Korea in regions such as North America, Germany, and Australia, emphasized the importance of understanding customers and developing new business models tailored to their needs.
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