[IPO Underwriting Competition] Revival of Foreign IBs Amid Consecutive Mega IPOs②

The year 2021 marks the biggest boom in the initial public offering (IPO) market ever. This year, 62 companies have entered the stock market, with the annual total amount raised through IPOs exceeding 17 trillion won. The fees earned by securities firms from underwriting, acquisition, and subscription processes alone amount to several hundred billion won. The profits generated from the influx of funds into the public offering market are also enormous. Consequently, competition among securities firms for underwriting has become fierce. With a series of IPOs scheduled after Chuseok, the rankings of IPO underwriters are also becoming clear.

[Asia Economy Reporter Lim Jeong-su] Foreign securities firms have shown remarkable performance in this year’s IPO market. Credit Suisse (CS) Securities, JP Morgan, Citigroup Global Markets Securities, and other foreign firms that had only maintained a presence in the IPO market have formed a competitive landscape with domestic large securities firms. As companies such as KakaoBank, SK i-Technologies, Krafton, and Hyundai Heavy Industries seek to attract global investors and proceed with IPOs one after another, foreign securities firms have made a comeback.

According to the investment banking (IB) industry as of September 22, a total of seven underwriters have managed IPOs with public offerings exceeding 1 trillion won. Leading domestic IPO market players Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, and KB Securities rank at the top, while CS Securities, JP Morgan, and Citi Securities are closely competing with these major domestic firms.

In particular, CS Securities has underwritten 2.8 trillion won, closely chasing the first-place Mirae Asset Securities by about 400 billion won. While ranked fifth in the first half of the year with a single co-underwriting of SK i-Technologies, CS Securities surged into the second tier in the third quarter by successfully managing the IPO underwriting for KakaoBank, Krafton, and Hyundai Heavy Industries.

Although Mirae Asset leads with 17 underwriting cases, CS Securities is chasing closely with only four cases. JP Morgan is competing for fifth place with KB Securities, having managed three IPOs: SK i-Technologies, HK Inno.N, and Krafton. Citi Securities ranks seventh with two IPOs: KakaoBank and Krafton.

The strong performance of foreign securities firms in IPO underwriting is a result of the entry of major companies into the stock market. When conducting large-scale public offerings worth several hundred billion won or over 1 trillion won, attracting overseas investors significantly influences the success of the offering. For this reason, Krafton selected CS Securities, JP Morgan, and Citi Securities as underwriters to handle overseas investor recruitment, while KakaoBank chose CS Securities and Citi Securities for the same purpose.

The IB industry expects foreign securities firms to continue delivering strong results in the domestic IPO market for some time. An industry insider said, "Companies pursuing IPOs will continue to utilize foreign securities firms with global networks as IPO partners who can raise corporate value through global public offering success and attract participation from diverse investors."

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