IPO Typhoon 'Big Hit' Approaching... Subscription Frenzy Continues

Demand Forecast for Institutions at the End of This Month... Subscription Starts Early October
KakaoGames Subscription Refunds Expected to Inflow Massively, 58 Trillion Won

[Asia Economy Reporter Minwoo Lee] Big Hit Entertainment (Big Hit), the agency of world-class idol group BTS, will officially begin its initial public offering (IPO) process starting with a demand forecast for institutional investors at the end of this month. Attention is focused on whether the 'subscription frenzy' that intensified through SK Biopharm and Kakao Games will reach its peak with Big Hit.

According to the financial investment industry on the 4th, Big Hit will conduct a demand forecast for institutional investors over two days from the 24th to the 25th and finalize the public offering price on the 28th. Subsequently, subscription for general investors will take place on the 5th and 6th of next month. NH Investment & Securities, Korea Investment & Securities, and JP Morgan are the lead underwriters for the listing. Mirae Asset Daewoo is serving as a joint underwriter. Aiming for listing on the KOSPI market, Big Hit plans to offer a total of 7.13 million shares this time. The expected public offering price ranges from 105,000 to 135,000 KRW per share. The expected maximum amount to be raised is 962.6 billion KRW, surpassing SK Biopharm (959.3 billion KRW) and Kakao Games (384 billion KRW). It is regarded as this year's 'largest IPO' and is expected to enjoy unprecedented popularity.

The enthusiasm for subscription confirmed through SK Biopharm was amplified through Kakao Games. The subscription for Kakao Games' public offering, which closed on the 2nd, attracted deposits totaling 58.5543 trillion KRW, setting a new record. This is about 2.5 times the previous record set by SK Biopharm (30.9899 trillion KRW). According to the Korea Financial Investment Association, as of the 31st of last month, the balance in securities firms' CMA accounts, which can be used to purchase financial products such as funds or equity-linked securities (ELS), reached an all-time high of 60.9633 trillion KRW. This represents an inflow of approximately 5 trillion KRW within a month from 56.077 trillion KRW at the end of July. After the Kakao Games subscription closed on the 2nd, the balance dropped to 4.504 trillion KRW.

Industry experts predict that the funds newly injected into the stock market during the Kakao Games subscription could directly move to Big Hit's public offering subscription. Although the subscription deposits for Kakao Games will be refunded on that day, most are expected to remain in the stock market rather than returning to banks. According to Samsung Securities, the lead underwriter for Kakao Games' listing, only 12% of customers chose bank accounts as the refund destination after subscription. This means that 88% of the refund funds remain in the stock market and are likely to be used for future public offering subscriptions.

Lee Jaeman, a researcher at Hana Financial Investment, said, "Although Kakao Games' public offering amount is about 40% of SK Biopharm's, the subscription deposits exceeded it, showing that individual investors' interest in public offering subscriptions and stock market investment remains high." He added, "Considering the approximately 58 trillion KRW in Kakao Games' subscription refund funds, low deposit interest rates, and stringent real estate regulations, which leave few alternatives for investment in the market, it is highly likely that these funds will remain in securities accounts for Big Hit's public offering subscription or stock market investment next month."

This content was produced with the assistance of AI translation services.