LG Energy Solution Institutional Orders 1 Quadrillion... IPO Fundraising Underway

LG Energy Solution's Record-Breaking IPO Price Expected at 300,000 KRW
Hyundai Engineering to Launch Next Month, Major Listings Anticipated
This Year's IPO Scale Set to Hit All-Time High

[Asia Economy Reporters Song Hwajeong and Ji Yeonjin] The demand forecast for LG Energy Solution, considered the biggest IPO of the year, set an astonishing record with institutional orders exceeding 1 quadrillion won, heating up the IPO market at the beginning of the year. As the IPO parade of companies is expected to continue in January, this year is also projected to record the largest public offering scale in history, following last year.

According to the financial investment industry on the 13th, institutional orders during the two-day demand forecast held on the 11th and 12th are estimated to have exceeded 1 quadrillion won, so the public offering price is expected to be fixed at the upper end of the expected band (275,000 won to 300,000 won), at 300,000 won. Based on this, the public offering amount is 12.75 trillion won, the largest scale in the history of the domestic stock market.

With LG Energy Solution’s unprecedented success, the investment enthusiasm in the IPO market is expected to continue this year. From the beginning of the year, companies have been lining up for subscriptions, and the IPO market has already heated up since January. A total of 10 public subscription offerings are scheduled this month alone. LG Energy Solution plans to conduct a general subscription on the 18th and 19th and list on the 27th.

Next month, another major player, Hyundai Engineering, will enter the market. Hyundai Engineering’s desired public offering price band is 57,900 won to 75,700 won, and based on this, the estimated market capitalization is between 4.63 trillion won and 6.05 trillion won. In addition, major listings such as CJ Olive Young, SSG.com, Market Kurly, and Hyundai Oilbank are expected to follow, and the public offering scale this year is projected to break the record again. Na Seungdoo, a researcher at SK Securities, said, "The total annual public offering scale this year is expected to exceed 25 trillion won," adding, "The LG Energy Solution public offering amount of 12.75 trillion won accounts for 65.3% of last year’s total IPO public offering amount, and the revival of such large IPO deals will highlight the IPO market, which was sluggish at the end of last year."

The stock market funds used for public subscription are warming up. According to the Korea Financial Investment Association, as of the 11th, investor deposit funds stood at 64.6642 trillion won, still the lowest level since the beginning of the year. Investor deposit funds had increased to 71.7327 trillion won on the first trading day of the new year, January 3rd, but then showed a declining trend. However, on the 10th of this month, they slightly turned to an increasing trend from 64.4325 trillion won. The balance of CMA accounts, which can be used to subscribe to public stocks, decreased from 69.1867 trillion won on the 3rd to 67.4194 trillion won on the 11th.

In the case of last year, when the public stock investment fever was strong, investor deposit funds surged on the first day of the record-breaking public stock subscription. SK IET Technology, which raised the largest subscription deposit in history (80 trillion won), saw investor deposit funds increase from 69 trillion won five trading days before the subscription to 73 trillion won on the first subscription day, April 28. SK Bioscience also increased by 5 trillion won in five trading days to 68 trillion won on the first subscription day, and Kakao Bank rose to 71 trillion won. However, Kakao Pay’s investor deposit funds shrank to 63 trillion won on the first subscription day. Kakao Pay’s 100% equal allocation seems to have less impact on stock market funds.

The market expects that if LG Energy Solution succeeds in gathering record-breaking subscription deposits in the subscription phase as it did in the demand forecast, it could put pressure on the KOSPI index. Kang Songcheol, a researcher at Eugene Investment & Securities, said, "When the market capitalization of IPO stocks exceeds 2% of the KOSPI market capitalization on a monthly basis, it has often acted as a burden on the index," adding, "In the case of LG Energy Solution, assuming a market capitalization of 70 trillion won, it exceeds 3% of the KOSPI market capitalization, which could be a short-term supply-demand burden."

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