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SK IE Technology’s IPO price set at top end; record demand at bookbuilding

SK IE Tech’s IPO price set at top end as demand soars

Apr 26, 2021 (Gmt+09:00)


SK IE Technology's EV battery separator.
SK IE Technology's EV battery separator.

The initial public offering price of South Korea’s SK IE Technology Co. has been set at the top end of the proposed band, reflecting a record-high demand from institutional investors during a bookbuilding process.

SK IE Technology (SKIET), the battery materials subsidiary of SK Group, priced its offering at 105,000 won per share, its parent SK Innovation Co. said in a regulatory filing on Apr. 26.

The IPO price comes at the top end of the company’s proposed price band of 78,000 won and 105,000 won apiece, signaling strong demand from investors.

During the two-day bookbuilding with institutional investors on Apr. 22-23 to gauge the bidding interest from investors, the sellers attracted a total of 3,166 trillion won in subscription from large investors, including the National Pension Service (NPS) and BlackRock Inc., the world’s largest asset manager. That’s the highest amount ever in such subscriptions in Korea.

The bookbuilding was 1,883 times oversubscribed, also posting an all-time high ratio.

Despite the unprecedently strong demand, however, SK Innovation said it will not revise up SK IE Technology’s IPO price during the initial share sale scheduled for mid-May.

With the set IPO price, SK will likely raise 2.3 trillion won ($2.1 billion) from the share sale – the fourth largest amount in Korea following Samsung Life Insurance’s 4.89 trillion won in IPO, Netmarble Corp.'s 2.66 trillion won and Samsung Biologics Co.'s 2.25 trillion won.

About 63.2% of the institutional investors, including the NPS, have agreed to a lock-up clause, promising not to sell the stock post-IPO for at least three months.

SHARE DEMAND BOOSTED BY UPBEAT BATTERY OUTLOOK

“Investors are very positive about the outlook of the rechargeable batteries. They also think highly of SK IE Technology’s battery separator technology,” said Mirae Asset Securities Co., the lead manager of the IPO.

SK and the IPO manager will take orders from retail investors on Apr. 28-29.

SKIET, which makes lithium-ion battery separators (LiBS), plans to float 21.39 million shares, or 30% of its total outstanding shares, on the main bourse through the IPO.

SK IE Technology’s IPO price set at top end; record demand at bookbuilding


For the IPO, SKIET plans to issue 8.55 million new shares, while SK Innovation will sell 12.83 million of its SKIET shares. With the sale of 12.83 million shares that amount to a 22.7% stake, SK Innovation will be able to secure 1.35 trillion won in operating funds.

SK Innovation will retain a 61% stake in SK IE Technology after the IPO, according to the regulatory filing.

Market watchers say if SKIET debuts on the Kospi market with its opening price double the offering price and reaches the daily upper limit of 30%, then it could touch 273,000 won, taking the company’s total market capitalization to close to 19.5 trillion won, similar to its parent SK Innovation.

SKIET has said it will build two additional battery separator plants in Poland to meet the rising demand for electric car batteries. The project, valued at around 1.2 trillion won, marks SKIET’s single largest investment.

SKIET was the first South Korean company to develop lithium-ion battery separators in 2004, and the first in the world to develop the sequential stretching process technology in 2007.

Write to A-Young Yoon at youngmoney@hankyung.com

In-Soo Nam edited this article.

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