Stock Market 'Cold Wind' Causes 25% Sharp Decline in Last Year's IPO Performance

[Asia Economy Reporter Lee Jung-yoon] Due to the stock market downturn last year, both initial public offerings (IPOs) and paid-in capital increases decreased, resulting in earnings plunging nearly 25% compared to the previous year.

According to the Financial Supervisory Service on the 25th, the total amount of public offerings of stocks and corporate bonds last year was KRW 204.5747 trillion (stocks KRW 21.9408 trillion, corporate bonds KRW 182.6339 trillion), down 11.6% (KRW 26.9046 trillion) from the previous year.

The stock public offering performance totaled 174 cases, KRW 21.9408 trillion, a 24.6% (KRW 7.1495 trillion) decrease from the previous year. IPOs numbered 115 cases, KRW 13.3515 trillion, increasing by 5 cases compared to the previous year but decreasing by KRW 1.171 trillion in amount. As the public offering market shrank, KOSPI listings dropped from 14 cases the previous year to 4 cases last year. KOSPI recorded 4 cases worth KRW 10.5268 trillion, and KOSDAQ had 111 cases worth KRW 2.8247 trillion.

Paid-in capital increases were 59 cases, KRW 8.5893 trillion, down 30 cases and KRW 5.9785 trillion from the previous year. As the stock market weakness continued, the number and amount of paid-in capital increases for KOSPI-listed companies fell to about half compared to the previous year. In the KOSPI market, there were 18 cases worth KRW 5.9814 trillion; KOSDAQ had 37 cases worth KRW 2.2117 trillion; KONEX recorded 1 case worth KRW 18.5 billion. Unlisted companies accounted for 3 cases worth KRW 377.7 billion.

Last year, corporate bond issuance totaled 3,382 cases, KRW 182.6339 trillion, down 9.8% (KRW 19.7551 trillion) from the previous year.

General corporate bonds were 325 cases, KRW 30.373 trillion, down 35.0% (KRW 16.35 trillion) from the previous year. The proportion of high-grade bonds rated AA or higher increased from 66.6% to 75.5%, while lower-grade bonds rated A and BBB or below decreased from 33.4% to 24.5%.

Additionally, amid ongoing uncertainties such as interest rates, the proportion of long-term bonds (over 5 years) decreased by 6.3 percentage points from 14.5%, while the proportion of medium-term bonds (over 1 year up to 5 years) increased by 6.1 percentage points from 84.7%, showing a trend toward shorter maturities. Although funds for facilities and operations decreased, issuance was mainly for debt repayment purposes.

Financial bonds totaled 2,209 cases, KRW 138.0328 trillion, down 1.1% (KRW 1.5798 trillion) from the previous year. Financial holding companies issued 86 cases worth KRW 11.684 trillion, up 25.9%, whereas bank bonds were 248 cases worth KRW 52.0858 trillion, down 0.8%. Other financial bonds were 1,875 cases worth KRW 74.263 trillion, down 4.6%.

At the end of last year, the total outstanding corporate bond balance was KRW 623.5097 trillion, down 0.2%.

Furthermore, in 2022, the issuance amount of commercial papers (CP) and short-term bonds totaled KRW 1,555.4179 trillion, down 6.1% (KRW 101.0082 trillion) from the previous year. CP issuance increased by 4.8% (KRW 19.8723 trillion) to KRW 432.905 trillion. Short-term bonds decreased by 9.7% (KRW 120.8806 trillion) to KRW 1,122.5129 trillion.

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