Public Offering Stocks' 'Daemabulsa' Shaken...Rise of Small and Mid-Cap Companies

Krafton Opens Below IPO Price... Kakao Bank, SKIET Also Fail to Hit Double Jump
Ajou Steel Sees High Competition Rate... Maxst Leads Market with Triple Jump

[Asia Economy Reporter Song Hwajeong] The atmosphere surrounding large-scale initial public offerings (IPOs), once considered jackpot opportunities, is changing as Krafton, a highly anticipated IPO, underperforms. Recently, small and mid-sized IPOs have been leading the market rather than the large-scale ones.

As of 9:25 a.m. on the 11th, Krafton was trading at 441,000 KRW, down 13,000 KRW (2.86%) from the previous day. Krafton, which was early on regarded as a major IPO, disappointed investors as it failed to attract strong demand in both the pre-IPO demand forecast and general subscription, and its opening price fell below the public offering price. Its general subscription competition rate was only 7.8 to 1, making it the weakest performer among recent IPOs. KakaoBank, another major IPO, performed well in the demand forecast and general subscription but failed to achieve the ‘ttasang’ (opening price at double the public offering price followed by hitting the upper limit) on its first day of listing. SK IE Technology, a large IPO listed in May, also fell more than 20% on its first day, failing to achieve ‘ttasang,’ indicating that the formula ‘major IPO listing = ttasang’ no longer holds.

While large IPOs are underperforming, small and mid-sized IPOs are making strides and driving the IPO market. Among three companies that held general subscriptions on the 9th and 10th, small and mid-sized companies Ajou Steel and Brains Company recorded higher competition rates than Lotte Rental, the number one car rental company in Korea. Lotte Rental’s general subscription competition rate was 65.81 to 1, whereas Ajou Steel and Brains Company recorded four-digit competition rates of 1491.73 to 1 and 1190.39 to 1, respectively.

Post-listing performance of small and mid-sized stocks is also relatively good. While large IPOs consecutively failed to achieve ttasang, Maxst, which was listed on the 27th of last month, recorded ‘ttasangssang’ (opening price at double the public offering price followed by hitting the upper limit for three consecutive days). Maxst is the third company to achieve ttasangssang after SK Biopharm, which opened the large IPO season last year, and Samsung Must SPAC 5, which was listed on KOSDAQ in June.

WantedLab, which entered KOSDAQ on the same day, also succeeded in achieving ttasang and has since shown a rise of over 27%. WantedLab, which held its general subscription during the same period as Krafton, recorded a competition rate of 1731 to 1. Its subscription deposits amounted to 5.5291 trillion KRW, surpassing Krafton’s 5.0358 trillion KRW.

Na Seungdu, a researcher at SK Securities, analyzed, "Most companies newly listed earlier this year formed high opening prices and maintained favorable stock price trends, but since entering the second half of the year, the selection between companies has intensified. While it is important to set a relatively attractive public offering price, investor interest varies greatly depending on the growth momentum of the underlying industry and market conditions."

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