After a painful and prolonged pause that had cast a shadow over its ambitious plans, the Indian arm of the South Korean electronics giant LG Electronics is set to make its triumphant return to the public markets.
The company is now reportedly preparing to launch its landmark initial public offering in the week beginning October 6, a blockbuster deal that is expected to raise about 115 billion rupees (1.3 billion dollars).
The revival of the IPO is a powerful sign of renewed confidence, but it comes at a significant price.
The company is now valued at around 9 billion dollars, a steep and humbling discount from the 15 billion dollar valuation it had been seeking when it first filed its papers last December.
A victim of volatility, a story of resilience
The journey to this public listing has been a rollercoaster. LG Electronics India Ltd. first filed its papers with the Indian market regulator in December, with a plan for its parent company to sell a 15 percent stake.
While it secured the necessary approvals in March, the company was forced to slam the brakes on the issue in April as a wave of market volatility sent its potential valuation tumbling.
Now, after refiling its preliminary prospectus with updated financials, the company has once again secured regulatory approval and is poised to launch one of the largest floats to hit the booming Indian market this year.
According to a report in Bloomberg, the final version of the prospectus is set to be filed early next week.
A booming market, a crowded field
LG is re-entering a market that is brimming with activity. Indian share sales have bounced back with a vengeance after a lull in the first quarter, with the benchmark NSE Nifty 50 Index soaring about 12 percent from its March low.
This renewed momentum has created a fertile ground for new offerings, and LG’s IPO would be the third billion-dollar deal to hit the market this year, following in the footsteps of HDB Financial Services Ltd. and Hexaware Technologies Ltd.
The company’s long-term commitment to the Indian market is not in doubt. It recently announced plans to invest about 600 million dollars over the next four years in a new factory in Andhra Pradesh, its third major plant in the country.
Now, with a roster of top-tier banks, including Morgan Stanley and JPMorgan Chase & Co., advising on the share sale, all the pieces are in place for a successful, if slightly less grandiose, debut.
While the final size and timing of the IPO may still change, the message from Seoul is clear: the long and winding road to Dalal Street is finally nearing its end.
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