LG Electronics Inc. is exploring an initial public offering (IPO) for its Indian business as part of a strategy to reach $75 billion in electronics revenue by 2030. The South Korean company’s Chief Executive Officer, William Cho, mentioned that listing in India is one of several options under consideration to rejuvenate its longstanding consumer electronics division. This marks the first public acknowledgment by LG of an Indian market debut amid ongoing market speculation.
Strategic Goals and Revenue Targets
Cho, who became CEO in 2021 after a lengthy tenure with LG Group, has set ambitious growth targets for the company. LG aims to boost its electronics business revenue to 100 trillion won ($75 billion) by 2030, up from approximately $65 billion in 2023. A key component of this strategy is to increase revenue from enterprise clients, aiming for about 45% of sales from other businesses by the end of the decade, up from the current 35%.
When asked about the potential IPO in India, Cho stated, “It is one of many options we can consider.” He acknowledged the heightened interest among global investors but emphasized that no decision has been finalized yet.
Growth Prospects in India
India represents a significant growth market for LG. In the first half of this year, LG’s revenue in India surged 14% to a record 2.87 trillion won, with net income rising 27% to 198.2 billion won. An IPO in India would align with the country’s booming capital markets, where over 200 companies went public in 2023, raising $7.1 billion. This makes India one of the most active markets globally for IPOs.
LG is closely monitoring the Indian market and analyzing similar IPOs in the industry. While LG has not yet determined a potential valuation for its Indian unit, the move would coincide with Hyundai Motor Co., another South Korean company, preparing for an Indian IPO to raise up to $3.5 billionversification and Innovation Strategy
Beyond the potential IPO, LG is focusing on diversifying and growing new business segments. Cho aims to develop several businesses capable of generating over 1 trillion won in annual revenue. This includes the heating, ventilation, and air-conditioning (HVAC) sector, where LG operates 11 production sites globally. Notably, LG’s chillers—large-scale air conditioners for buildings—have seen significant demand from data centers supporting artificial intelligence (AI). Over the past three years, LG’s overseas sales of chillers have grown by 40% annually.
LG is also expanding its subscription services for home appliances. In South Korea, customers can rent products like washing machines and laptops for three to six years by paying a monthly fee. This model has been well-received, with 35% of consumers opting for subscriptions. The company is now introducing these services in Malaysia, with plans to expand to Thailand, Taiwan, India, and potentially the US and Europe. LG expects revenue from its subscription business to increase by 60%, reaching about $1.3 billion in 2024.
In addition to HVAC and subscription services, LG is investing in its free, ad-supported streaming services. Cho announced that LG plans to invest 1 trillion won by 2027 to expand its webOS-based advertising and content business, reflecting the company’s strategy to capitalize on digital media and advertising revenue.
CEO’s Global Experience and Vision
William Cho, aged 61, brings extensive international experience to his leadership role, having worked with LG in North America, Germany, and Australia. He emphasizes understanding customer needs and creating innovative business models as central to LG’s strategy. Cho’s global perspective is shaping LG’s diverse expansion plans, from potential IPOs to new business ventures in various markets.
LG Electronics’ consideration of an IPO in India is part of a broader strategy to diversify and grow its business, aiming for significant revenue increases by 2030. The company is leveraging its strong presence in the Indian market and exploring new revenue streams, such as HVAC, subscription services, and digital media, to achieve its ambitious targets.
