For South Korean conglomerates, India is no longer just a prime consumer market, it is also becoming a financial platform.

By listing its Indian subsidiary on the local exchange this May, LG Electronics is doing more than unlocking new streams of capital; it is also making a corporate commitment to one of the world’s most robust consumer growth markets.

Following Hyundai Motor India’s record-breaking – but retail-tepid – initial public offering last year, LG Electronics becomes the second major South Korean conglomerate to test India’s equity waters.

LG Electronics India is aiming to raise up to US$1.5 billion by offering a 15% stake, valuing its Indian unit at around US$13 billion. The public float, approved by the Securities and Exchange Board of India, will be used to fund a third manufacturing plant, expand local product lines, and bankroll potential regional acquisitions.

Diversified regional integration

With geopolitical tensions between the United States and China, and now most of Asia, reshaping global supply chains, India is increasing its pull as a credible manufacturing and consumer market alternative. LG’s IPO could mark a strategic inflection point, from export-reliant operations serving North America to a new diversified regional integration across South and Southwest Asia, the Middle East, and Africa.

With a stronger consumer base than Hyundai Motors, LG Electronics is a familiar and well-liked brand among Indian consumers. The Seoul-based company currently controls a third of the Indian washing machine market and nearly a fifth of its air-conditioning sector. In 2024, LG posted record sales in the country of US$2.8 billion, and it believes there is ample room for more home appliance penetration into Indian households.

But the Indian IPO path isn’t entirely risk-free. Hyundai Motor’s 2024 IPO, India’s largest-ever at US$3.3 billion, stumbled on debut, falling 6% as retail participation lagged. While institutional demand was robust, it seemed local investors were more cautious.

Despite the rising global tensions, India remains an attractive market with its young aspirational population and strong consumer demand. Hyundai may have tested the waters with its IPO. However, if LG’s Indian listing is successful, it could yet encourage other global players, especially in the consumer goods space, to follow suit and tap into India’s growing capital pool.