Seoul: LG Electronics Inc., South Korea's leading home appliance maker, announced plans to sell a 15 percent stake in its Indian subsidiary through an initial public offering (IPO) expected to be completed as early as next month. This move aims to secure funding for the company's future growth.

According to Yonhap News Agency, the IPO of LG Electronics India Ltd. is estimated at around 1.8 trillion won (approximately US$1.28 billion). The board of LG Electronics has approved the stake sale, although the exact date and pricing have not been finalized. The company plans to submit a final securities report to the Securities and Exchange Board of India (SEBI) and awaits final approval to proceed with the offering.

LG Electronics initiated the IPO process in December with a preliminary listing application, receiving conditional approval from SEBI in March. The expected proceeds from the IPO notably surpass LG Electronics' cash and cash equivalents, which stood at 1.1 trillion won by the end of June. Analysts, including Moody's Investors Service, have indicated that listing the Indian unit could enhance LG Electronics' financial profile.

The Indian subsidiary's valuation is projected to exceed 12 trillion won, outperforming peers in the Indian stock market such as Voltas Ltd. and Whirlpool India, valued at around 7.2 trillion won and 2.4 trillion won, respectively. Post-IPO, LG Electronics will maintain an 85 percent stake in the subsidiary.

The growing demand for consumer durables in India has attracted global companies to the local stock market. Last year, Hyundai Motor Co. set a record by raising $3.3 billion through its Indian listing.