This Year's IPO Subscription Deposits Reach 300 Trillion Won... "Nearly Half of Next Year's Budget Proposal"

Subscription Deposits of 300 Trillion Won Flood 6 Trillion Won Public Offering
Nearly Half of Next Year's Budget Proposal

12 Stocks Attract Over 5 Trillion Won Each... Only 1 Last Year
Krafton, KakaoBank, SK Bioscience Await Next Year

[Asia Economy Reporter Minji Lee] Despite the COVID-19 pandemic this year, abundant liquidity has attracted individual investors to the initial public offering (IPO) market, resulting in subscription deposits worth tens of trillions of won.

According to the financial investment industry on the 20th, the IPO market for this year has concluded with a total of 76 newly listed companies (excluding corporate acquisition and merger SPACs), raising a public offering amount of 5.7 trillion won and attracting subscription deposits totaling 295.5 trillion won. The IPO market for this year ended on the 16th with the listing of Sekyung AT, a nano-material technology company.

[Image source=Yonhap News]

This amount is more than three times that of 2019 (76 companies) and 2018 (78 companies), both of which did not reach 100 trillion won. Although there are no official statistics on subscription deposits, it is estimated to be the largest scale ever. The total market capitalization of South Korea’s stock market from SK Hynix, ranked second with 86.2 trillion won, to Naver, ranked sixth with 46.4 trillion won, combined (as of the 18th, 291 trillion won) is less than this amount, which also exceeds half of South Korea’s total budget for next year (558 trillion won).

There were 12 stocks that attracted subscription deposits exceeding 5 trillion won. In 2018 and 2019, there was only one such stock each year. Kakao Games attracted 58.5 trillion won, while Big Hit and SK Biopharm attracted 58.4 trillion won and 30.9 trillion won respectively. The largest subscription deposit record to date was 30 trillion won for Cheil Industries in December 2014.

The competition rate to secure one share was also fierce. Kakao Games recorded 1,524 to 1, Big Hit 607 to 1, and SK Biopharm 323 to 1. Additionally, Iruda, a skin care medical device company that held its subscription in July, recorded a competition rate of 3,039 to 1, and Younglimwon Soft Lab, a resource management system (ERP) developer, recorded a competition rate of 2,500 to 1.

The IPO market’s huge success is due to abundant liquidity caused by historically low interest rates. In particular, the success of SK Biopharm’s subscription in June served as a catalyst. SK Biopharm’s public offering price was 49,000 won, but its stock price hit the upper limit consecutively after listing, once exceeding 200,000 won.

This year’s IPO market enthusiasm is expected to continue next year. Game company Krafton, vaccine specialist SK Bioscience, Kakao affiliates Kakao Bank, Kakao Pay, Kakao Page, and LG Energy Solution, which spun off from LG Chem’s battery business, are all planning IPOs next year.

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