LG Energy Solution, LG’s automotive battery manufacturing unit, announced that it had officially started its initial public offering (IPO) process. The electric vehicle (EV) battery manufacturer estimated that its stock listing could raise around $10 to $12 billion, leading to South Korea’s largest IPO so far.
LG Energy’s IPO could undoubtedly surpass the current record holder for the biggest-ever listing in South Korea, Samsung Life Insurance. When Samsung Life Insurance went public in 2010, its IPO brought in around 4.9 trillion won ($4.39 billion).
Meanwhile, investment banking industry sources stated that LG Energy applied for a preliminary share listing approval to the Korea Exchange. According to LG Energy’s appraisal, its enterprise value could reach 100 trillion won ($900 million). LG Energy’s IPO would transpire during this year’s third quarter, with KB Securities Co. and Morgan Stanley managing the listing.
LG Energy develops rechargeable batteries for numerous uses, including energy storage facilities, laptops, smartphones, and more. Presently, LG Energy is one of the world’s most prominent EV battery technology developers, providing supplies to distinguished clients. Some of the battery maker’s customers include General Motors Co. and Tesla Inc.
Fast-Growing Global EV Market
Industry watchers also expect the worldwide EV market to grow significantly. Last year, the global battery-powered EV sales increased to nearly 2.5 million. Moreover, IHS Markit, an analytics firm, projected that EV sales would increase by up to 70% this year. During InterBattery 2021, LG Energy showcased its latest EV battery innovations, further strengthening its global clean energy provider identity.
“With automakers racing towards electrification and investors seeing it as the auto industry’s next big growth opportunity, LG Energy Solution’s IPO will likely attract strong demand,” said Cho Hyun-Ryul, a Samsung Securities analyst.
In addition to expanding research and development, LG Energy also plans to address the ever-heightening EV market demand. To this end, the battery manufacturer would utilize the IPO proceeds to enhance its market competitiveness and increase facility capacities.
Industry analysts also expect LG Energy to use the funds for more investments in the US battery production sector. Earlier, LG Energy and General Motors revealed that they would construct their second EV battery facility in the US. Separately, SNE Research’s data indicated that as of April 2021, LG Energy ranks as the world’s no.2 EV battery supplier.
Other South Korean Stock Listings
Furthermore, LG Energy’s IPO is one of the many stock listings from South Korean companies this year. For instance, Coupang listed its stocks on the New York Stock Exchange in March. SK IE Technology, an SK Innovation subsidiary, also filed for an IPO domestically, with its listing accumulating over $2 billion.
Lotte Rental also began its IPO process and aimed to raise over 400 billion won. Similarly, Kakao Pay filed for its IPO, becoming South Korea’s first mobile fintech firm to go public. Another Kakao unit, Kakao Entertainment, plans to list its stocks in 2022, targeting to expand its content production operations.
