Kakao Games makes a splash; raising over $13.5 bn in public subscription deposits

Kakao Games Corp. has raised over a staggering 16 trillion won ($13.5 billion) in deposits during the first day of its public subscription on September 1, according to the investment banking industry.

The company received 16.41 trillion won in deposits, with the overall bids outnumbering offers 427 to 1. Among the 3.2 million shares allocated to retail investors, there were demands for 1.36 billion shares on the first day.

Kakao Games is planning to raise 384 billion won via an initial public offering. The company plans to issue 16 million shares to both institutional and retail investors. The offering price will be 24,000 won ($20), projecting the company's enterprise value at 1.76 trillion won.

Industry sources are saying that the hype over Kakao Games’ public offering has reached a historic high seeing that the pace of capital injection is almost three times faster than SK Biopharmaceuticals Co., which pulled in a record-high 31 trillion won earlier in June during the public subscription period.

“Investors who weren’t able to participate in SK Biopharm’s subscription have all flocked to Kakao Games,” said a source from the investment banking industry. “There’s a good chance that Kakao Games will break SK Biopharm's record considering that heavy capital injection usually occurs on the final day,” said the source.

In June, SK Biopharm raised almost 6 trillion won during the first day with a subscription competition of 61 to 1. It closed with an additional 25 trillion won on the second day with a subscription competition of 323 to 1.

If Kakao Games’ subscription competition stands at 1,000 to 1, then an investor will secure a single share after depositing 12 million won ($10,132).

The company’s subscription period will end on September 2 at 16:00 pm KST. The shares will be allocated on September 4 with deposit refunds. The company is set to list on the tech-heavy KOSDAQ on September 10.



Kakao Games has been anticipated to become the country’s biggest initial public offering of the year. The game arm of South Korea's biggest messaging app Kakao Corp. posted record-high demand during its bookbuilding for institutional investors on August 25 and 26 with bids outnumbering offers 1,479 to 1, the Korean Investors reported earlier.

Kakao Games plans to use the proceeds to carry out active M&As within the game sector and diversify its content portfolio. In addition to robust M&A activity, the company will also shore up its portfolio toward directly developed games by investing in game companies.

The company earned 27.8 billion won in net profit on revenues of 203 billion won in the first half of this year, up 264% and 8.2% year on year, respectively.

The company’s affiliates Kakao Page Corp., Kakao Commerce Corp., and Kakao Bank are also expected to prepare for listings.

Write to Ye-jin Jun at ace@hankyung.com