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IPOs

Kakao Pay cuts IPO price by 6% for October listing

Market capitalization to be around up to $1 bn when listed, about $691 mn lower than earlier forecast

By Aug 31, 2021 (Gmt+09:00)

A Korean consumer makes a payment through Kakao Pay.
A Korean consumer makes a payment through Kakao Pay.

Kakao Pay Corp., the digital settlement platform unit of South Korea’s top messaging app operator Kakao Corp., has slashed its initial public offering (IPO) share price for its planned listing in October.

Kakao Pay resumed the process for listing on the main bourse by refiling a share sale prospectus to the Financial Supervisory Service (FSS) for approval on Aug. 31.

The mobile fintech platform is now seeking to price its shares between 60,000 won and 90,000 won ($51.9 and $77.8), about 6% lower than the earlier range between 63,000 won and 96,000 won. Its market capitalization is expected to be up to 11.7 trillion won ($1 billion) when listed, about 800 billion won lower than previously forecast.

Its bookbuilding is scheduled for Sept. 29-30, followed by retail subscription between Oct. 5-6.

Kakao Pay decided to adopt the equal share allocation system for all stocks to be sold to retail investors. Individual investors that subscribe 20 shares with a deposit of 900,000 won will receive the same number of the stocks.

The company had been predicted to slash the IPO price by 10%, according to investment banking (IB) industry sources earlier.

The regulator last month requested the company to submit the prospectus again, saying the earlier version lacked the information needed for investors to determine their purchase of new stocks on offer. The FSS earlier asked Krafton Inc. and SD Biosensor Inc. to lower their IPO prices amid doubts that their valuations could be exaggerated.

(Updated with Kakao Pay’s revised prospectus on Aug. 31)

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

Jongwoo Cheon edited this article.

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