LG Energy Solution IPO Price Likely at 300,000 Won... Institutional Orders Exceed 100 Trillion Won

Demand Forecasting for Institutions on 11-12th
Competition Rate Reaches 1500 to 1, Order Amount Exceeds 1 Trillion Won

[Asia Economy Reporter Minji Lee] LG Energy Solution is estimated to have set the public offering price at 300,000 KRW, achieving a record-breaking success in its initial public offering (IPO).

According to the financial investment industry on the 12th, LG Energy Solution reportedly exceeded a demand forecast ratio of 1,500 to 1 during the two-day bookbuilding process from the previous day to the 12th. Considering that institutional investors placed orders at the upper limit of the public offering price range (257,000 to 300,000 KRW) to secure shares, the total institutional order amount is estimated to have exceeded 100 trillion KRW.

This figure overwhelmingly surpasses previous major IPO demand forecast results, significantly exceeding the previous highest institutional order amount of 258.5 trillion KRW by KakaoBank. Some expect that the final demand forecast ratio for LG Energy Solution, to be announced on the 14th, will approach 1,900 to 1, surpassing the previous highest institutional ratio recorded by SK IE Technology (1,883 to 1).

This success is attributed to the relatively low valuation. Based on the upper limit of the public offering price, LG Energy Solution's expected market capitalization is 70 trillion KRW, but the securities industry assigns a higher value. The seven joint lead managers have estimated LG Energy Solution's appropriate market capitalization after listing at 112 trillion KRW, while Korea Investment & Securities and SK Securities have valued it at 100 trillion KRW.

Yoon Hyuk-jin, a researcher at SK Securities, said, "The comparable company to LG Energy Solution, China's CATL, had an EV (Enterprise Value)/EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) ratio of about 80 times last year, but even if LG Energy Solution's market capitalization is set at 100 trillion KRW, this ratio is about 43 times," adding, "Considering the risk of interest rate hikes, there is still ample room for price appreciation compared to the public offering price."

As competition to receive even one more share of the public offering was fierce, the proportion of institutions applying for lock-up agreements was also reportedly high. A lock-up agreement is a promise not to sell shares for a certain period after listing, and institutions that apply for this receive additional points. With a lower likelihood of institutional sell-offs on the listing day, the possibility of a sharp rise in LG Energy Solution's stock price has increased.

Meanwhile, LG Energy Solution will be listed on the KOSPI on the 27th of this month, following individual investor subscriptions on the 17th and 18th. Individual investors can subscribe through KB Securities, the lead manager, as well as joint managers Daishin Securities, Shinhan Financial Investment, and underwriters including Mirae Asset Securities, Hana Financial Investment, Shin Young Securities, and Hi Investment & Securities.

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