LG Setting Up New Plant In AP

New Delhi: LG Electronics India has plans to set up a new plant in Andhra Pradesh to boost its manufacturing capacity in the country, though it also fears competition from its South Korean parent entity. LG Electronics India, which has two manufacturing units at Greater Noida and Pune is also setting up a new plant in Andhra Pradesh to meet the growing demand. It has an installed capacity of 1,39,90,000 products at its Noida and Pune manufacturing units collectively. Besides products, it manufactures several key components, such as compressors and motors.

“As a testament to our commitment to India, we intend to construct a third manufacturing unit in Andhra Pradesh to expand our manufacturing capacity,” the company said.

LG Electronics India has already received nod for financial incentives under Andhra Pradesh Industrial Development Policy on November 26, 2024. Last week, LG Electronics India filed preliminary papers with Sebi for an initial public offering wherein the parent company will sell over 10.18 crore shares amounting to 15 per cent stake. After the listing of Hyundai Motors India Ltd, LG Electronics will be the second South Korean company that will tap the Indian stock market.

Though the company has not yet declared the price band, according to report from some market analysts, LG will raise Rs15,000 crore from the Indian market. The proposed IPO is entirely an offer for sale (OFS) of 10.18 crore equity shares by Souther Korean promoter LG Electronics with no fresh issue component. Since the public issue is completely an OFS, LG Electronics India will not receive any IPO proceeds. The funds raised will go to the South Korean parent.

Besides, it is increasing the sourcing of raw materials from the local market, which is helping it meet consumer demands and lower its inventory and related costs, allowing the company to competitively price the products, said LG in its DRHP filed with markets regulator Sebi. However, it also added that despite localisation efforts, there is a persisting reliance on foreign components and finished products, especially in the premium segment.

“Key imports are primarily sourced from countries such as China, South Korea, and Japan, reflecting a strategic focus on enhancing product quality and technological advancement,” it said.