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LG considers India IPO to facilitate its growth trajectory

Ana Mary Joseph
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LG considers India IPO to facilitate its growth trajectory
  • South Korean giant stands ready to turn its ambitious vision into reality, setting the stage for continued success in the coming decade.
  • Company is venturing into subscription services for home appliances—an innovative model that caters to evolving consumer preferences for affordability and convenience.

In the dynamic landscape of global consumer electronics, LG Electronics Inc. stands at a critical juncture, contemplating a strategic initial public offering (IPO) for its India business.

The potential move is not merely a financial manoeuvre; it embodies a broader strategy to reinvigorate its decades-old consumer electronics sector and align with ambitious revenue targets in an increasingly competitive environment.

Under the leadership of Chief Executive Officer William Cho, who has been at the helm since 2021, LG has set a formidable objective of achieving staggering annual revenue of 100 trillion won (approximately $75 billion) by the year 2030, compared to about $65 billion in 2023.

India: A fertile ground

India, with its burgeoning economy and expanding middle class, presents a fertile ground for consumer electronics growth. Recent developments indicate that LG’s revenue from its Indian operations surged 14 per cent in the first half of the year, reaching a record 2.87 trillion won.

Furthermore, the net income rose impressively by 27 per cent to 198.2 billion won.

Such robust growth metrics reflect LG’s successful penetration into the Indian market and bolster the case for an IPO, which would potentially attract a diverse range of global investors.

As highlighted by Cho, the increased interest among investors—particularly in light of India’s lively capital markets—positions the company favourably within the current economic climate. The Indian IPO landscape is already bustling, with numerous companies aiming to raise substantial funds, indicating a propitious climate for new listings.

Strategic considerations for IPO

Recognising the IPO as one of several strategic pathways to not only raise capital but also enhance visibility and market confidence, Cho told Bloomberg Television, “It is one of many options we can consider.”

The emphasis on exploring this route is rooted in a meticulous observation of the Indian market’s ongoing vibrancy and the recent influx of IPO activities within the region.

About 189 companies aim to sell shares to raise $5.6 billion this year, making it one of the busiest markets in this space.

At least 30 IPOs joined the pipeline as demand powered by domestic money pushes companies to explore listings.

Korean peer Hyundai Motor Co. is preparing to raise as much as $3.5 billion in an Indian IPO.

As the demand for shares intensifies, buoyed by domestic investments, LG’s consideration of an Indian debut signals an ambition to leverage the booming stock market to facilitate its growth trajectory.

The company’s revenue aspirations hinge not just on consumer sales but also on a calculated pivot towards enterprise clients, targeting a substantial increase in sales from businesses—from 35 per cent currently to 45 per cent by the decade’s end.

The diversification reflects a growing acknowledgment that success in consumer electronics is increasingly intertwined with commercial partnerships and initiatives. To this end, LG has identified potential revenue streams in various business units, reinforcing its commitment to innovation and adaptability.

Diversifying business models

In the context of its expansion aspirations, LG is not limiting its growth strategies to geographical diversification through an IPO. Rather, it is actively nurturing new business lines that can each yield significant revenue.

Notably, heavy investments in heating, ventilation, and air-conditioning (HVAC) signify LG’s intent to tap into emerging market demands, particularly those associated with artificial intelligence and data centre infrastructure. The impressive 40 per cent annual growth in overseas sales of LG’s chillers attests to this proactive approach.

Moreover, the company is venturing into subscription services for home appliances—an innovative model that caters to evolving consumer preferences for affordability and convenience. By offering rental options for essential products, LG is enhancing accessibility while potentially capturing a larger customer base.

This model, currently thriving in South Korea, is poised for expansion into Southeast Asian markets and beyond, reflecting the company’s forward-thinking approach to consumer engagement.

The company recently began offering subscriptions in Malaysia and plans to roll that model out to customers in Thailand, Taiwan and India starting this year, and potentially the US and Europe in the future. LG expects revenue from the subscription business to grow 60 per cent to about $1.3 billion in 2024.

Additionally, LG is enhancing its digital ecosystem through investments in its streaming services, with plans to invest approximately one trillion won in developing its webOS-based advertising and content business by 2027.

The diversification into digital content and services aligns perfectly with global market trends favoring integrated entertainment solutions alongside traditional product offerings.

Vision for the future

At the heart of these initiatives is Cho’s multifaceted leadership philosophy, honed over a distinguished career that spans continents and cultures. With half of his career spent outside Korea, he brings a global perspective to LG’s strategic pursuits, emphasising the importance of understanding diverse consumer landscapes.

His vision extends beyond the immediate financial targets to encompass a broader ambition: crafting innovative business models that resonate with modern consumers while establishing LG as a leader in integrated technology solutions.

Paytm shares dive on reports of fresh regulatory scrutiny

Ana Mary Joseph
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Paytm shares dive on reports of fresh regulatory scrutiny
  • SEBI inquiry revolves around allegations that Paytm may have misrepresented critical facts during the IPO process, specifically concerning the classification of its founder, Vijay Shekhar Sharma, as an employee rather than the founder.
  • Attention brought to Paytm’s governance practices may catalyse a reevaluation of compliance mechanisms across the sector, influencing how companies disclose information and engage with regulators moving forward.

Shares of Paytm, a pioneering entity in India’s fintech sector, fell nine per cent in intraday trading on reports that Securities and Exchange Board of India (Sebi) has issued show-cause notices to CEO Vijay Shekhar Sharma and board members for alleged misrepresentation of facts during the 2021 IPO.

As Paytm navigates the precarious landscape, the implications extend beyond just its stock price—they are indicative of the broader challenges that fintech companies encounter in a rapidly evolving regulatory environment.

The market’s reaction to the news of SEBI’s investigation was swift and severe, with shares plummeting by as much as 8.9 per cent, marking the steepest drop since February of the same year.

However, the shares ended down 4.48 per cent to Rs530 on Monday.

The decline can be interpreted as investors’ apprehension regarding the potential ramifications of a regulatory probe, reflecting the broader scepticism that often accompanies scrutiny from financial watchdogs.

The essence of the SEBI inquiry revolves around allegations that Paytm may have misrepresented critical facts during the IPO process, specifically concerning the classification of its founder, Vijay Shekhar Sharma, as an employee rather than the founder—an element that could potentially have ramifications for his eligibility for stock options.

Regulatory scrutiny

While representatives from SEBI have not commented publicly, the ramifications of such inquiries are profound. Regulatory bodies not only assess the veracity of financial disclosures but also the corporate governance practices of companies under their purview.

For Paytm, the stakes are particularly high considering the transformative role it has played in India’s fintech scene, from pioneering mobile wallets to introducing QR codes that have revolutionised payments for millions.

The specter of regulatory scrutiny is not new to Paytm. Earlier in the year, the Reserve Bank of India (RBI) imposed directives on Paytm Payments Bank, which have already strained operations and investor confidence.

The company’s stock has subsequently suffered a substantial decline of approximately 30 per cent since the RBI’s intervention, illustrating how intertwined regulatory actions are with market performance.

Such regulatory hurdles have necessitated shifts in corporate strategy, with Sharma pivoting towards focusing on digital payments and expanding financial services, including loans and cash-back offers.

Additionally, in a bid to streamline operations and bolster its core business, Paytm recently divested its movie and events ticketing arm to Zomato Ltd. for a noteworthy $244 million.

The divestment marks a strategic retreat from ancillary ventures, underscoring the company’s renewed focus on its primary market—digital financial services. Yet, beyond the immediate business response, it is essential to consider how these regulatory pressures could reshape the competitive landscape of the fintech sector in India.

Competitive landscape

Paytm’s emergence in the market came with substantial backing from major global players—including Jack Ma of Alibaba, Masayoshi Son of SoftBank, and Warren Buffett from Berkshire Hathaway.

However, the changing dynamics in the financial technology space highlight that perceived market leaders are not immune to challenges. Paytm now contends with fierce competition from well-resourced entities like Walmart Inc.’s PhonePe and Alphabet Inc.’s Google, as well as Jio Financial Services Ltd., championed by billionaire Mukesh Ambani. Each of these players is vying for a share of India’s burgeoning digital payments market, which is characterized by rapid innovation but also by a demand for transparency and compliance with evolving regulatory standards.

As Paytm continues to grapple with its regulatory challenges, the implications for the broader fintech landscape are significant. Should SEBI’s investigations yield adverse findings, the repercussions could reverberate across the industry, possibly leading to stricter regulations and oversight for other fintech entities.

Moreover, the attention brought to Paytm’s governance practices may catalyse a reevaluation of compliance mechanisms across the sector, influencing how companies disclose information and engage with regulators moving forward.

AirConsole in-car gaming coming to new Volkswagen models

TCN Bureau
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AirConsole in-car gaming coming to new Volkswagen models
  • Volkswagen expects to launch AirConsole in the first European countries from mid-September.
  • By the turn of the year 2024/2025, it is planned to extend the offering by several more games for even more European countries.

Volkswagen AG and the pioneer of in-car gaming AirConsole to bring its gaming experience to its drivers and passengers on new Passat, the new Tiguan, the new Golf and the new Golf Estate, in addition to ID.7, ID.5, ID.4 and ID.3 product lines (from ID. software 4.0).

The AirConsole gaming platform will provide enjoyable entertainment to people on the road, for example, when charging or during a break.

The new games of the AirConsole gaming platform are available on the infotainment display, which is transformed into a games console. The smartphone serves as the controller.

Recently, BMW and AirConsole launched Mattel’s classic card game UNO in over 500,000 BMW and Mini vehicles.

For the in-car gaming experience, the players simply need their smartphone, which acts as a controller, and the VW Active Info Display. After starting the AirConsole app in the vehicle, the connection between the smartphone and the vehicle is intuitively established by scanning a QR code on the display screen. Then players can get straight down to playing.

The AirConsole platform supports multiple players simultaneously. The rear passengers can also participate in the in-car gaming fun during stops. In general, it is possible to play alone or with all vehicle occupants together. Vehicles must be in park to enable gameplay.

Microsoft’s new Surface devices to hit UAE shelves soon

Ana Mary Joseph
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Microsoft’s new Surface devices to hit UAE shelves soon
  • Microsoft Pluton security processor will be enabled by default on all Copilot+ PCs.

Microsoft’s new Surface Pro and Surface Laptop, part of Copilot+ PCs portfolio, is now available in the UAE.

Adam Labancz, Surface Category Manager at Microsoft UAE, said that the new Surface devices have been designed for students, professionals and enthusiasts, looking to enhance their productivity by the power of AI experiences “we have never seen before.”

“Over the past year, we have seen an incredible pace of AI transformation with solutions such as Microsoft Copilot allowing us to do things that we never dreamed possible – and now, we begin a new chapter of AI innovation by introducing our first-ever Copilot+ PCs from Surface.”

Both devices have been developed to be secure by default,  Labancz explained, “At Microsoft, we believe that the best way to secure information on a PC is to secure the whole PC itself. All Copilot+ PCs are Secured-core PCs, bringing advanced security to both commercial and consumer devices. In addition to the layers of protection in Windows 11, Secured-core PCs also provide advanced firmware safeguards and dynamic root-of-trust measurement to help protect from chip to cloud.”

Furthermore, a Microsoft Pluton security processor will be enabled by default on all Copilot+ PCs. Pluton is a chip-to-cloud security technology – designed by Microsoft and built by silicon partners – with Zero Trust principles at the core.

This helps protect credentials, identities, personal data and encryption keys, making them significantly harder to remove from the device, even if a user is tricked into installing malware or an attacker has physical possession of the PC.

All Copilot+ PCs, including the all-new Surface Pro and Surface Laptop, will ship with Windows Hello Enhanced Sign-in Security (ESS). This provides more secure biometric sign ins and eliminates the need for a password.

The Microsoft Surface Pro 11th Edition Copilot+ PC and the Microsoft Surface Laptop 7th Edition Copilot+ PC will be available in the UAE from August 27. Estimated retail price for the Microsoft Surface Pro 11th Edition Copilot+ PC will start from AED4,099, while the price for the Microsoft Surface Laptop 7th Edition Copilot+ PC will start from AED3,999.

The laptop is available in two sizes: the 13.8-inch display in a more compact design and a 15-inch display for expanded visuals.

Indian credit card holders can now settle their bills on Cred

Mohammed Fahad
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Indian credit card holders can now settle their bills on Cred
  • By utilising the BBPS, Cred not only aligns itself with best practices for payment security but also ensures that users continue to earn rewards while managing their credit card bill payments.
  • Such rewards add a layer of incentive for users, encouraging responsible credit use and timely payments while enhancing customer loyalty.

In an era marked by rapid advancements in financial technology, the Bengaluru-based fintech firm Cred has taken a significant step forward in enhancing the bill payment experience for Indian credit card holders.

The fintech firm has received certification from NPCI Bharat Billpay to operate as a customer operating unit (COU) on the Bharat Bill Payments System, the company said.

The certification is not merely a regulatory milestone; it embodies the commitment of Cred to streamline the bill payment process for its users while ensuring enhanced security standards in an evolving digital landscape.

A new era of bill payment

The Bharat Bill Payments System, managed by the NPCI, serves as a crucial infrastructural asset in India’s digital payment ecosystem.

Acting as an interoperable and integrated platform, BBPS enables consumers to make recurring online bill payments seamlessly. With the introduction of Cred’s COU certification, users of the platform gain access to all billers that have integrated with the BBPS, positioning Cred as a significant player in the bill payments arena.

The development follows a recent directive from the Reserve Bank of India (RBI), which mandated that all credit card bill payments made via third-party applications—including Cred, PhonePe, Amazon Pay, and Paytm—be routed through the BBPS.

The regulatory shift aims to centralise bill payments, fortifying an environment characterized by user-friendly digital transactions and bolstered security.

The implications of this integration are profound. By utilising the BBPS, Cred not only aligns itself with best practices for payment security but also ensures that users continue to earn rewards while managing their credit card bill payments. Such rewards add a layer of incentive for users, encouraging responsible credit use and timely payments while enhancing customer loyalty.

Introducing CRED Guarantee

In tandem with the certification, Cred has made headlines with the launch of CRED Guarantee, a forward-thinking feature designed to support users in managing their credit card outstanding amounts more efficiently.

With CRED Guarantee, users can rest assured that as long as they clear their dues in full through the platform before the due date, any late fees incurred will be covered by Cred.

The innovative approach not only alleviates the pressure surrounding bill payments but also fosters financial discipline among users.

Kunal Shah, the founder of Cred, emphasised the importance of this certification: “With the COU certification, we can settle payments on time, every time, and guarantee its settlement.”

The statement reflects a broader vision for Cred that hinges on empowering its members through innovative products and solutions, thus enhancing their overall financial journey. Shah’s assertion also underscores the vital role that digital public infrastructure plays in fostering fintech innovation in India.

Significant impact

Cred’s achievements in the realm of bill payments cannot be understated. In July alone, the platform facilitated over INR 15,000 crores in credit card bill payments via the BBPS.

Moreover, the COU certification enables Cred to establish partnerships with major billers and banks that have also joined the BBPS, potentially expanding the range of services it can offer to users.

The statistics in this domain are compelling; Cred claims that more than 14 million members have collectively settled credit card dues exceeding INR 13.2 lakh crores on the platform.

Furthermore, approximately 4 million users reported improvements in their credit scores, attributable to their timely payments within a span of 12 months.

The financial prudence fostered by Cred’s services is further highlighted by the INR 981 crores in late fees that members have managed to avoid in the past year—a testament to the positive financial behaviors encouraged by the platform.

Axio secures $20m funding to boost fintech sector

Ana Mary Joseph
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Axio secures $20m funding to boost fintech sector
  • Axio is positioned to enhance customer experience further and tailor its credit products to diverse consumer segments
  • Cofounders say the investment would facilitate scaling their loan book while ensuring robust risk control measures.

The Indian fintech space has undergone a remarkable transformation in recent years, innovating traditional banking practices and pioneering new financial services tailored to diverse consumer needs.

Among its rising stars is Bengaluru-based digital lender Axio (formerly known as Capital Float), which has recently secured an infusion of $20 million (approximately ₹167.8 crore) from the Amazon Smbhav Venture Fund.

The strategic funding is not merely a financial booster for Axio; it represents a significant endorsement of its business model and long-term vision.

Background and evolution

Founded in 2013 by entrepreneurial visionaries Gaurav Hinduja and Sashank Rishyasringa, Axio has evolved from a nascent startup into a substantial player in the digital consumer finance sector.

Initially registered as CapFloat Financial Services Private Limited, a non-banking finance company (NBFC) with the Reserve Bank of India (RBI), Axio has channeled its efforts towards democratiaing access to credit for millions of underserved consumers in the Indian market.

The company’s ethos centres on flexibility and convenience, epitomised by its offerings, which include ‘pay later’ solutions, personal credit, and tools for financial management.

Axio has made remarkable strides since its inception, reportedly achieving an annualised disbursement of $1 billion while maintaining a low non-performing assets (NPA) ratio of 2-3 per cent. Such metrics not only underline Axio’s operational efficiency but also signify the firm’s commitment to responsible lending practices.

Recent funding round

The recent funding round involves a significant issuance of 1,125,000 preference shares priced at ₹1,486 each, intended to augment Axio’s operational capacity and product offerings.

While the firm opted not to disclose all investor identities, it is noteworthy that Amazon’s reinforcement of its stake—already at approximately 8 per cent prior to this venture—emphasises a deeper collaboration, which could indicate strategic synergy aimed at innovating alongside the e-commerce titan.

With plans to scale operations and expand their checkout finance solutions, Axio is positioned to enhance customer experience further and tailor its credit products to diverse consumer segments. Cofounders Hinduja and Rishyasringa highlighted the importance of this fresh capital, asserting that the investment would facilitate scaling their loan book while ensuring robust risk control measures.

As Axio moves forward, it’s crucial to analyze its financial trajectory. In the fiscal year ending March 2023, Axio reported a doubling of revenue to ₹220 crore, up from ₹110 crore the previous year. Although the firm faced a modest increase in net losses to ₹137 crore, this can be contextualized within the rapid expansion phase that many fintech enterprises undergo.

The infusion of capital will likely enable Axio to invest in technology and personnel, ultimately driving profitability as market penetration deepens.

Indian fintech growth

The timing of this funding aligns almost perfectly with the broader patterns observed within the Indian fintech ecosystem, which is anticipated to swell to $2.1 trillion by 2030.

India’s demographic landscape is characterised by a youthful, tech-savvy population eager for non-traditional banking solutions. Axio’s mission to innovate financial products aligns with the evolving consumer expectations, which emphasize speed, convenience, and personalised services.

The implications of Axio’s investment are profound when considering the vast pool of potential customers in India—estimated to be 200 million consumers who are yet to be integrated into the formal credit system.

By harnessing advanced data analytics and machine learning algorithms, Axio aims to unlock access to credit for these underserved populations. This aligns with the Indian government’s broader push to enhance financial inclusion and promote economic empowerment across its demographic spectrum.

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