Coupang's US listing: How to split $95.6 mn underwriting fees?

Goldman Sachs, JPMorgan, Allen & Company and six other underwriters of Coupang Corp.'s US stock market listing last week are set to receive a combined $95.55 million in fees, or 2.1% of the IPO funding of $4.55 billion, according to the US EDGAR filing website.

Accordingly, the nine IPO bookrunners will be paid $0.735 per share priced at $35, which valued the South Korean e-commerce platform at $63 billion, higher than earlier market projections of $50 billion. 

The fee rate, discounted because of its IPO size, is below the typical 5-7% paid to the underwriters of US stock market listings. Back in 2014, Chinese online retailer Alibaba.com paid 1.2% in underwriting fees for its $21.7 billion IPO, or $68 per share.

In Japan, IPO managers receive 3% in fees, higher than the 1% range in South Korea, according to investment banking sources.

Among the nine underwriters, lead manager Goldman Sachs, which had worked on the Coupang IPO for a decade, and two other main underwriters -- JPMorgan and Allen & Company -- are taking a larger portion of the pay. 

Six other joint-bookrunners are Citigroup Global Markets, HSBC, Deutsche Bank, UBS, Mizuho and CLSA.

"In the past, underwriters who played a bigger bookbuilding role received an additional fee as an incentive. But these days, underwriters split fees almost equally," said another investment banking source.

Alongside the IPO, Coupang is understood to have secured a credit line of up to $1 billion from its IPO underwriters. 

Its underwriting fees are drawing interest as South Korean premium food delivery startup Market Kurly is tapping global banks to prepare for a US stock market listing, according to banking sources. Kurly recently terminated its contract with IPO manager Samsung Securities Co., fueling market speculation that it will follow in the footsteps of bigger hometown rival Coupang.

A week after the US trading debut, Coupang's founder and Chief Executive Kim Bom-suk sold 1.2 million Class A stocks of the company at $35 apiece, totaling $42 million.

Write to Ri-Ahn Kim at knra@hankyung.com
Yeonhee Kim edited this article.