Withdrawal of Listings Floods In, Approval Reviews Tighten... IPOs Without Shadows Until May

[Asia Economy Reporter Lee Seon-ae] The initial public offering (IPO) market is rapidly contracting. Amid dissatisfaction with corporate valuation in a highly volatile market environment and difficulties in attracting investors, there is a flood of listing withdrawals, and except for SPACs seeking merger targets until May, no companies are going public. Companies currently undergoing listing are facing delays due to the Korea Exchange's stringent review process.

According to the Korea Exchange on the 28th, except for SPACs such as Kiwoom SPAC 6 and Mirae Asset Vision SPAC 1, the public offering schedule is completely empty until the end of April. In this situation, listing withdrawals are also flooding in. Recently, following Hyundai Engineering and Daemyung Energy, Voronoi also decided to withdraw its listing. A Voronoi official stated, "We conducted demand forecasting for institutional investors over two days on the 14th and 15th to finalize the public offering price, but considering various conditions such as difficulties in accurately evaluating corporate value, we submitted a withdrawal report."

Since they had already received listing approval, they can attempt listing again without re-examination within six months, but if the market sentiment does not improve significantly this year, the prevailing view is that listing within the year is unlikely. After six months, the listing process must be started from the beginning. The reason Hyundai Engineering withdrew in January and Daemyung Energy in February was also due to poor demand forecast results.

Some companies have withdrawn at the preliminary listing review stage. Korea Institute of Drug Research, Fine Medics, Mico Ceramics, and Future Medicine withdrew their applications during the preliminary review stage this year. Cases of lowering the valuation despite proceeding with listing have also increased. Inka Financial Services, Stonebridge Ventures, Noeul, and Moa Data set their public offering prices below the lower end of the desired range.

For companies already engaged in listing procedures, schedules are delayed due to the exchange's stricter reviews. Taelim Paper and Daemyung Energy took 76 days and 71 days respectively to receive review approval. Typically, preliminary reviews take 45 business days, but these exceeded three months.

Currently, 41 companies are awaiting approval from the exchange, including Shaperon, SK Shieldus, Socar, Kyobo Life Insurance, Hyundai Oilbank, and One Store. Moreover, 26 of these 41 companies applied for preliminary review last year. While personnel changes in early this year are cited as a cause of delays, increased demands for thorough review and supervision from the listing threshold due to embezzlement and breach of trust cases also appear to have influenced the situation.

The IPO drought in the first half of the year is expected to ease in the second half. This is because the entire IPO process?‘review application → review approval → demand forecasting → new listing’?is taking longer. Socar is currently attracting attention as a major upcoming IPO. If Socar, which applied for preliminary review on January 5, successfully lists in the second half, it is expected to open the way for IPOs of similar companies such as Green Car, Kakao Mobility, and T Map Mobility. Na Seung-doo, a researcher at SK Securities, forecasted, "There is hope that stock market variables will be somewhat removed and stability restored in the second half, and with major companies preparing for listing still remaining, the IPO market will recover."

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