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IPO fees

SK Bioscience’s $1.3 bn IPO generates $10 mn in underwriting fees

Mar 08, 2021 (Gmt+09:00)

A branch of Korea Investment Securities, a co-underwriter of SK Bioscience's IPO
A branch of Korea Investment Securities, a co-underwriter of SK Bioscience's IPO

The initial public offering of SK Bioscience Co. was priced at the upper end of its price band of 65,000 won ($57.3) per share on Monday to raise 1.49 trillion won ($1.3 billion) for the South Korean vaccine maker. The IPO will generate 11.9 billion won ($10 million) in fee income for its six IPO underwriters, including lead manager NH Investment & Securities Co.

During the bookbuilding process last week, the IPO shares allotted for institutional investors were oversubscribed by 1,275 to one. It drew 1,464 bidders, including Singapore’s GIC, Bank Norwegian and 290 other foreign institutions, according to sources involved in the process.

The underwriting fee, set at 0.8% of the IPO value, will be shared among NH Investment and five co-underwriters – Korea Investment & Securities, Mirae Asset Daewoo Securities, SK Securities, Samsung Securities and Hana Financial Investment.

NH Investment is underwriting 551.9 billion won worth of the shares for a fee of 4.4 billion won.

 Underwriters  Underwriting fee income
 NH Investment  4.4 billion won
 Korea Investment  2.7 billion won
 Mirae Asset  2.6 billion won
 SK Securities  1.0 billion won
 Samsung Securities         600 million won
 Hana Financial        600 million won

SK Bioscience's share offering changed the league table of Korean IPO managers, catapulting NH Investment to the top spot in terms of underwritten IPO share value.

 Amount of underwritten IPO shares before SK Bioscience IPO, by company
 Samsung Securities  371.0 billion won
 Mirae Asset  185.3 billion won
 Korea Investment    61.6 billion
 Daishin Securities    34.1 billion
 Shinhan Investment          20.7 billion won

 Year-to-date total IPO fee income, including SK Bioscience IPO
 Samsung Securities   12.3 billion won
 Mirae Asset Daewoo  8.8 billion won
 Korea Investment  5.2 billion won
 NH Investment  4.4 billion won
 KB Securities  2.1 billion won
 Daishin Securities  1.5 billion won 
 Hana Financial Investment  1.1 billion won

This IPO valued the spin-off of SK Chemical Co.’s vaccine division at 5 trillion won, despite the controversy surrounding its IPO valuation.

Of institutional bidders, 77.5% offered to subscribe to the new shares above the upper end of the price band of 65,000 won, with another 18.5% bidding at the top end. Of the total, 60% agreed to a mandatory holding period, which will entitle them to obtain more additional shares than other bidders.

SK Bioscience will receive subscriptions from retail investors between Tuesday and Wednesday, before it lists on the Korea Exchange on Mar. 18.

By Geun-Ho Im

eigen@hankyung.com 

Yeonhee Kim edited this article.

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