Skip to content
  • KOSPI 3006.17 +14.45 +0.48%
  • KOSDAQ 1006.60 +9.96 +1.00%
  • KOSPI200 397.83 +1.52 +0.38%
  • USD/KRW 1181.2 -2.50 -0.21%
  • JPY100/KRW 1,040.48 -2.75 -0.26%
  • EUR/KRW 1,331.15 -4.48 -0.34%
  • CNH/KRW 185.41 -0.32 -0.17%
View Market Snapshot

IPOs

KakaoBank’s $2.3 bn IPO set to alter Korea’s banking landscape

With other Kakao Corp. affiliates set to go public by 2022, the group could overtake Hyundai as Korea's No. 4 conglomerate

By Jun 28, 2021 (Gmt+09:00)

KakaoBank’s .3 bn IPO set to alter Korea’s banking landscape

KakaoBank Corp., the mobile banking unit of online messaging app giant Kakao Corp., is looking to raise as much as 2.55 trillion won ($2.26 billion) via an initial share sale – a move widely seen to be a game changer in South Korea’s banking industry.

KakaoBank, the country’s largest Internet-only lender, plans to sell 65.45 million shares at between 33,000 won and 39,000 won apiece, the company said in a regulatory filing on Monday.

Given the indicative price range, the company would raise between 2.16 trillion won and 2.55 trillion won from the share sale, the first initial public offering by an internet-only bank in Korea.

With a successful IPO, KakaoBank’s market capitalization would reach 18.5 trillion won based on its total outstanding shares, rendering it the third most valuable lender in Korea following KB Financial Group’s market cap of 23.74 trillion won and Shinhan Financial Group Co.’s 21.57 trillion won.

The company said it will proceed with a bookbuilding process to gauge demand from institutional investors July 20-21. Subscriptions from individual investors will take place for two days from July 26 after finalizing the IPO price.

If all goes smoothly, KakaoBank’s stock will start trading on the main Kospi bourse from Aug. 5.

KB Securities Co. and Credit Suisse Group are the lead managers for the share offer.

KakaoBank’s .3 bn IPO set to alter Korea’s banking landscape

KAKAO PAY TO FOLLOW SUIT

Separately, Kakao Pay Corp., the digital settlement platform unit of Kakao Corp., said on Monday it has obtained approval from the stock market operator to proceed with its IPO plan.

The mobile fintech platform is seeking to price its shares between 73,700 won and 96,300 won to raise as much as 1.9 trillion won.

The suggested price will value the company’s total outstanding shares between 9.8 trillion won and 12.8 trillion won when listed.

Kakao Pay is expected to go public in mid-August, about a week after KakaoBank’s debut.

The listings of Kakak Corp.’s two affiliates will likely push the online platform group’s combined market cap above 100 trillion won.

As of June 28, Kakao Corp.’s market cap stood at 68.8 trillion won while that of Kakao Games Corp., which went public last year, was 4.1 trillion won. The Kakao group’s value would rise to some 105 trillion won if KakaoBank and Kakao Pay are listed at the high end of the indicative IPO prices.

Kakao Pay
Kakao Pay

Kakao Corp.’s other affiliates such as Kakao Entertainment and Kakao Mobility are also lined up for an IPO next year, when the group could overtake Hyundai Motor Group as the main bourse's fourth-largest stock at over 150 trillion won in market capitalization, analysts said.

Currently, Kakao Corp., which operates the country’s most popular messenger app Kakao Talk, is the fifth-largest conglomerate in terms of market cap, after Samsung, SK, LG and Hyundai.

STRONGER INTEREST FROM RETAIL INVESTORS

KakaoBank’s planned IPO follows the successful debut of online retail giant Coupang Corp. in New York in March as well as a proposed share sale by game developer Krafton Inc., which is pushing to list its shares on the main bourse this summer.

Industry watchers say KakaoBank will likely draw stronger interest from retail investors than share sales by other big companies, given its growth potential as an internet bank.

“Traditional banks’ enterprise values are usually determined with a price-book ratio of less than one. But internet banks' values, more often than not, are higher as they can operate at fewer costs with no physical branches,” said a market analyst.

KakaoBank launched in 2016 after the government started giving online banking permits for the first time in the country in 2015. The internet-only bank has benefited from Kakao Talk, the country’s largest mobile messenger service with 46 million active users out of a population of about 51 million.

KakaoBank’s .3 bn IPO set to alter Korea’s banking landscape

CAPITAL GAINS

KakaoBank’s existing shareholders are set to book significant capital gains from a successful IPO.

Korea Value Asset Management Co. and Korea Investment Holdings Co. own 26.97% and 4.65% of KakaoBank, respectively. They have invested a combined 800 billion won in the internet-only lender and their return on investment could rise to 5 trillion won if the stock is listed at the top end of the indicative price.

Other investors include KB Kookmin Bank (a 9.3% stake), Netmarble, eBay Korea and Korea Post.

KakaoBank is seeking to go public as competition in the online banking sector heats up.

Korea’s mobile financial platform Toss, operated by Viva Republica Inc., is also planning to launch Toss Bank in the third quarter of this year.

Both Toss Bank and KakaoBank will compete with crosstown rival K Bank, the internet-banking arm of telecom giant KT Corp.

Write to Ye-Jin Jun, Jin-Seong Kim and A-Young Yoon at ace@hankyung.com

In-Soo Nam edited this article.

Comment 0

0/300