Busy IPO Market Preparing for Success... 'Donghak Ants' Subscription Threshold Also Lowered

'KOSPI 3000' Era Heats Up
Maximum Waiting Funds & Major IPOs Line Up
13 Companies for January Demand Forecast
Strong Start to Major IPO Rally

From This Month, Over Half of 25% Individual Allotment of Public Shares Equally Distributed

[Asia Economy Reporter Minji Lee] In the year of the Ox, which marked the opening of the KOSPI 3000 era, initial public offerings (IPOs) by companies aiming to list on the domestic stock market are unfolding rapidly.

According to the financial investment industry on the 8th, excluding three SPAC mergers this month, a total of 13 companies are undergoing demand forecasting procedures. This is a significant increase compared to the number of companies that conducted demand forecasting in January over the past three years: one in 2022, five in 2018, and three in 2017.

The start is overwhelming even compared to 2017, when 82 companies, mainly pharmaceutical and bio firms, conducted IPOs raising a total of 8 trillion KRW. A financial investment industry official said, "Usually, many companies begin listing from May to June after submitting audit reports and completing the stock exchange’s listing review," adding, "This year, the IPO market atmosphere is different from previous years, and companies aiming to list are lined up until February."

Bio companies, IT software, and secondary battery-related firms, which have recently attracted attention in the stock market, also stand out in the IPO market. Among the preliminary listed companies in January, the one with the largest public offering amount is the bio company Prestige BioPharma. It is preparing for a KOSPI listing with a public offering amount reaching 383.5 billion KRW. Of this, 346.7 billion KRW is planned to be used for research and development and clinical trials. The sale of existing shares accounts for 8.8%, approximately 33.5 billion KRW.

The secondary battery-related equipment manufacturer Yuil Enerneck (KOSDAQ), which is leading the domestic stock market, plans to raise 26.5 billion KRW, with 14 billion KRW allocated for facility investment and 5 billion KRW for product development. It will issue about 1.72 million new shares, and the sale of existing shares amounts to 7.7 billion KRW. Additionally, CNTOOS Seongjin, which benefits from mask demand amid the resurgence of COVID-19, and SoluM, spun off from Samsung Electro-Mechanics’ Digital Module (DM) division with sales in the 800 billion KRW range, are also knocking on the stock market door.

Companies listing this month will be subject to an equal allocation method. Half of the total public offering shares allocated to individuals (25%) will be distributed equally to all individual investors who have paid at least the minimum subscription deposit. The remaining shares will be distributed differentially according to the amount of deposit paid by investors, as before. This follows last year’s revision of the ‘Securities Underwriting Business Regulations’ by financial authorities, which pointed out that small-scale subscribers had limited opportunities in public offering subscriptions. Until last year, the entire allocation for general investors (20%) was distributed in order of the largest deposit amount under the differential allocation method.

However, the increase in allocation volume due to the additional 5% share of high-yield trust public offering stocks will not apply. According to the Securities Underwriting Business Regulations, this applies only to companies that submitted their initial securities registration statement after January 1.

Although there were not many large-scale IPOs at the start of January, a rally of large companies’ listings is expected in this year’s IPO market. In the first half of the year, SK Bioscience, which develops and produces vaccines, and SKIET, a materials business subsidiary of SK Innovation, are on standby. Other SK Group companies preparing for IPOs include ADT Caps, 11st, and SK Broadband.

In mid-year, the ‘Kakao Trio’?Kakao Bank, an internet-only bank under Kakao; Kakao Pay, a fintech company; and Kakao Page, a content platform company?are expected to list consecutively. In the second half, LG Energy Solution, which was spun off from LG Chem’s battery business division, is preparing for an IPO. Considering the scalability of the battery business, the securities industry estimates its corporate value to reach 50 trillion KRW. Additionally, among domestic unicorn companies, the PUBG developer Krafton, accommodation specialist Yanolja, social commerce company TMON, and mobility company Socar are also expected to list on the domestic stock market.

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