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IPOs

Online players head S.Korea's biggest month for IPOs

PUBG label Krafton and Kakao's banking app set to lead July IPOs estimated at over $7 billion

By Jul 01, 2021 (Gmt+09:00)

(Getty Images Bank)
(Getty Images Bank)

South Korea's initial public offering market in July is expected to see its largest-ever amount of share issues for a single month, worth over 8 trillion won ($7 billion), driven by the popular online game PUBG label Krafton Inc. and the banking platform of the mobile giant Kakao Corp.

The estimated July IPO value is set to eclipse the 5.75 trillion won recorded for the entire year of 2020 in the country, according to data compiled by Market Insight. A combined market value of the July IPO companies is likely to surpass 60 trillion won, compared with the domestic stock market capitalization of about 2,700 trillion won.

In particular, Krafton, the developer of the multiplayer battle royale game, PlayerUnknown's Battlegrounds (PUBG), is seeking to raise about 4 trillion won. KakaoBank is looking to raise as much as 2.55 trillion won.

Krafton and KakaoBank are set to become the country's two mega IPOs this year, overshadowing SK IE Technology Co. (SKIET), the biggest IPO in the first half of this year that raised 2.25 trillion won. 

Both IPO heavyweights will begin their almost simultaneous bookbuilding for multibillion-dollar IPOs later this month, in a hurry ahead of an expected interest rate increase later this year.

Further, the two online players seem to have no time to lose. To attract foreign investors, they need to complete the listings within 135 days of drafting financial statements, as advised by the US Securities and Exchange Commission. If they fail to go public within the period, they would need to refile their financial statements and redo the IPO process to draw non-resident investors, meaning a further delay in their IPOs.

High-profile IPOs slated for July and August

Company Name IPO Price Band (KRW) Projected Market Cap (KRW)* Bookbuilding Date IPO Managers
SD Biosensor 45,000-52,000** 5.3 trillion July 5-6 NH Investment & Securities, Korea Investment & Securities, Samsung Securities, KB Securities
KakaoBank 33,000-39,000 18.5 trillion July 20-21 KB, Korea Investment, Hana Financial Investment, Hyundai Motor Securities
HK inno.N 50,000-59,000 1.7 trillion July 22-23 Korea Investment, Samsung Securities
Krafton 400,000-498,000** 24.4 trillion July 14-27 Mirae Asset Securities, NH, Samsung
Kakao Pay 73,700-96,300 12.8 trillion Early Aug. Samsung, Daishin, JPMorgan

Note: *Market cap projections are based on the top end of the indicative ranges.
         **Krafton and SD Biosensor revised down IPO price bands this week.

Source: Market Insight

DOWNWARD REVISIONS TO IPO PRICES

Krafton's IPO timetable was delayed by about one month after the regulatory Financial Supervisory Service (FSS) expressed concerns about its high IPO price and advised voluntary correction of its valuation estimate. Accordingly, the company on July 1 trimmed its offering price by about 10%, and scaled back the size of its new share issues by 20%.

Earlier this week SD Biosensor Inc., South Korea's largest manufacturer of COVID-19 test kits, revised down its IPO price range by about 40%. The rapid global spread of the Delta coronavirus variant, however, is likely to underpin the share price of the diagnostic reagent maker.

HK inno.N Corp., best known for its top-selling anti-hangover drink CONDITION, is set to debut on the Kosdaq junior market after its valuation has doubled since Kolmar Korea acquired the pharmaceutical company for 1.3 trillion won in 2018.

SD Biosensor and HK inno.N are seeking to raise more than 600 billion won in IPOs, respectively.

Next month, Kakao Pay, a mobile payment app, is seeking to raise up to 1.9 trillion won in an IPO.

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

Yeonhee Kim edited this article.

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