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Hyundai Heavy becomes third-most subscribed Korean IPO

The world's No.1 shipbuilder prices its IPO at top of price guidance to raise about $1 billion

By Sep 08, 2021 (Gmt+09:00)

Hyundai Heavy becomes third-most subscribed Korean IPO
Hyundai Heavy Industries Co. became the third-most subscribed stock in South Korea after its initial public offering drew 1,130 trillion won ($968 billion) in bids from institutional investors last week.

The world's largest shipbuilder priced its IPO at 60,000 won, at the top of its price guidance, to raise 1.08 trillion won, according to the company's public disclosure.

Its shares were oversubscribed 1,836 times, which its bookrunners said underscored investors' confidence in the recovering shipbuilding industry. Slightly over half of the institutional investors agreed to the mandatory holding of the stock for a period ranging from 15 days to six months.

Hyundai Heavy will begin its trading on the Korea Exchange on Sept. 16 with a market capitalization of 5.3 trillion won.

The bookbuilding result marked the third-most competitive subscription after SK IE Technology (SKIET), the battery materials subsidiary of SK Group, and HK inno.N Corp., a pharmaceutical company. Institutional investors bid for both IPOs over 1,800 times the offer earlier this year.

Hyundai Heavy, wholly owned by Korea Shipbuilding & Offshore Engineering Co., is floating 18 million shares, or 20% of its shares outstanding.


The retail portion of Hyundai Heavy shares was 405.5 times oversubscribed, attracting 56 trillion won in deposits. Individual investors deposited an average of 32.7 million won for the subscription. An investor with a deposit of 24.3 million won will be allotted one share.
A series of the recent shipbuilding orders, including a 1.65 trillion won order from Denmark’s A.P. Moller-Maersk, has improved Hyundai's earnings outlook, amid expectations that the declining iron ore price will pull steel plate prices lower, reducing their raw material costs. 

Hyundai Heavy Chief Executive Han Young-seuk said last week that the company would spend 70% of its IPO proceeds, or about 760 billion won, to develop eco-friendly and digital shipbuilding technologies, as well as building smart shipyards and hydrogen-related facilities.

Credit Suisse, Mirae Asset Securities Co. and Korea Investment & Securities Co. are joint bookrunners of the IPO.

Write to Ye-jin Jun at

Yeonhee Kim edited this article.

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