Three big IPOs in next four weeks

Three big initial public offerings (IPOs) are happening from the end of this month through the first week of August.

KakaoBank, Krafton, and Kakao Pay will go public within a 10-day period, giving investors a hectic summer.

The internet-only KakaoBank will start the season by taking subscriptions for 65.45 million shares on July 26 and 27.

Then it's Krafton turn to sell 8,654,230 shares on Aug. 2 and 3, followed by Kakao Pay's offering of 17 million shares on Aug. 4 and 5.

Prices for none of the shares have been fixed yet, but based on revealed price bands, shares of Krafton, known for its battle royale game PlayerUnknown's Battlegrounds, will be the most expensive at around 400,000 won ($348) per share.

KakaoBank's price band starts at 33,000 won and Kakao Pay's at 63,000 won.

While many households borrowed heavily to invest in the stock market from last year through the beginning of this year -- stimulated by such big IPOs as SK Bioscience and SK IE Technology -- brokerages and banks are expecting a similar wave of borrowing soon. The normal pattern is that a massive amount is borrowed, and then a big chunk returned very quickly by investors who weren't able to get in on the IPOs.

Even investors who do get their desired shares sometimes sell them fast -- at a profit -- and pay back loans.

"We are ramping up our systems to prepare for a massive surge in traffic during the IPO season," a source from a local brokerage said.

Investors have already started to craft strategies to subscribe to shares of all three companies, or at least two of them.

Some have chosen to target cheaper IPOs.

"I've decided to pass on Krafton, mostly due to its high valuation," said Jeon Dong-min, a 33-year-old office worker living in Gyeonggi. "I've set aside cash to subscribe to shares for two Kakao companies. I'm not planning to borrow."

Some have more aggressive plans.

"In the past, I've borrowed around 20 to 30 million won to subscribe to IPOs because I can pay loans back after selling the shares on the first or second day of listing," said Kim Ji-su, a 30-year-old Seoul resident. "I plan to do the same for the upcoming IPOs."

With the IPO market heating up, major brokerages have decided to take commissions on IPO subscriptions.

The service used to be free if users subscribed to shares online rather than at offline offices at most brokerages, except for Korea Investment & Securities and SK Securities.

However, Samsung Securities announced last month that it will be taking a 2,000 won commission per subscription starting June 28. If an investor fails to get shares in an offering, the commission will be waived.

Mirae Asset Securities followed suit and decided to take 2,000 won commission per subscription from July 5.

KB Securities decided to take 1,500 won commission per subscription from July 23.

For all of the brokerages, IPO subscriptions will still be free for loyal customers with records of past trades.

For instance, at KB Securities, customers are categorized into five different categories depending on their trading records. Only the lowest loyalty level will be charged a commission.

"Retail investors tend to take out money deposited in their brokerage accounts once IPO subscriptions are over," a spokesperson from Mirae Asset Securities said. "We are hoping more customers stay as loyal customers of our brokerage, since they only need to meet a few qualifications to achieve a customer level we waive commissions for."

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]