It's the year of the IPO and six months are still left
Big names like Krafton, KakaoBank, LG Energy Solution and Hyundai Heavy Industries are planning to go public within the year. More than 10 companies valued at over 1 trillion won ($880 million) are set to go public in the second half.
According to Korea Exchange, some 40 companies have either submitted applications for initial public offerings (IPOs) for preliminary approval this year or passed preliminary screenings.
In 2021, Korean companies are likely to raise a total of 30 trillion won through IPOs, a three-fold increase compared to 2010 when companies raised about 10.1 trillion won. 2010 was Korea's biggest year for IPOs to date.
Krafton, the developer of PlayerUnknown's Battlegrounds, is already off to a good start.
The company is offering 10,060,230 shares at between 458,000 won and 557,000 won each, according to its regulatory filing on June 16. If the upper end of the range is hit, 5.6 trillion won worth of shares will be sold.
Korea's biggest IPO to date was Samsung Life Insurance’s 4.88-trillion-won offering in 2010. Coupang raised $4.6 billion earlier this year, though the listing was on the New York Stock Exchange.
SK IE Technology and SK Bioscience, the two big IPOs in the first half of the year, raised 2.2 trillion won and 1.5 trillion won, respectively.
Krafton's IPO could give the company a market cap of between 23 trillion won and 30 trillion won. NCSoft, one of Korea's top three game companies, currently has a market cap of around 18 trillion won.
Krafton's offering price will be fixed and announced on July 12. Public subscriptions will take place on July 14 and 15.
Kakao affiliates are other big IPOs.
KakaoBank, Kakao’s massively successful online-only bank, gained preliminary approval for an IPO by the Korea Exchange on June 17. The bank has not submitted its securities registration statement yet.
Kakao Pay, which offers mobile payment services, is currently awaiting preliminary approval for its IPO. A decision is expected within the year.
On June 8, LG Energy Solution, LG Chem’s fully owned battery-making subsidiary, applied for preliminary approval to list its shares on the country's main stock market within the year.
The battery maker is expected to raise some 10 trillion won. With the IPO, the market cap of LG Energy Solution will reach between 80 trillion won to 102 trillion won, according to analyst Park Yeon-ju from Mirae Asset Securities. This means it could possibly beat LG Chem, which currently has a 59 trillion won market cap, and even SK hynix, with an 89 trillion won market cap.
Lotte Rental submitted an IPO application on May 31 and Hanwha General Chemical about a week later.
“Companies want to go public within the year amid excess liquidity in the market,” an executive from a brokerage who is in charge of listings said on the condition of anonymity.
Krafton is the last big IPO retail investors can subscribe to through multiple brokerage houses. With a revision of Financial Investment Services and Capital Markets Act, multiple subscriptions are banned for companies who have submitted securities registration statements after June 20.
Koreans can try to buy Krafton shares via all three underwriters – Mirae Asset Securities, NH Investment & Securities and Samsung Securities.
“With the ban, investors will not spread their money into many different accounts,” said Choi Jong-kyung, a senior analyst at Heungkuk Securities. “This doesn’t mean that the IPOs would lose steam [from investors].”
BY HWANG EUI-YOUNG, SARAH CHEA [firstname.lastname@example.org]