Kakao Pay delays IPO following regulator request to refile prospectus

Kakao Pay Corp., the digital settlement platform unit of South Korea’s top messaging app operator Kakao Corp., is delaying its planned initial public offering until after September following a regulator request that it correct its share sale prospectus.

According to the investment banking industry on Tuesday, Kakao Pay will soon readjust its IPO schedule, including the bookbuilding with institutional investors and subscriptions from retail investors, and submit it to the Financial Supervisory Service (FSS) again for approval.

The regulator last week said the prospectus filed earlier by Kakao Pay lacked the information needed for investors to determine their purchase of new stocks on offer.

Originally, the mobile fintech platform was scheduled to complete the required procedures and list its shares on the main bourse by the end of August.

Samsung Securities, Goldman Sachs and JP Morgan are managing the IPO. Daishin Securities is the joint bookrunner.

MARKET DOUBTS OVER ITS VALUATION

The postponement comes after the financial regulator asked two other companies readying for IPOs to rewrite their filings, citing similar reasons amid market doubts that their valuations and indicative IPO prices could be exaggerated.

Earlier this month, game developer Krafton Inc. said it is lowering its IPO share price amid criticism over its high valuation followed by a request from the financial regulator to correct its registration statement.

COVID-19 test kit maker SD Biosensor Inc. has also lowered its IPO price by 40% from the initial proposal following an FSS request to revise its prospectus.

MAY CUT IPO PRICE

Kakao Pay said earlier it is seeking to price its shares between 63,000 won and 96,000 won to raise as much as 1.63 trillion won.

The suggested price band will value the company’s total outstanding shares between 8.21 trillion won and 12.51 trillion won when listed.

Earlier this year, brokerage firms estimated Kakao Pay's enterprise value to hover around 10 trillion won, but the fintech company has set its target at 16 trillion won, above the market consensus.

Considering that Kakao Pay was valued at around 600 billion won when it was spun off from Kakao Corp. in 2017, the company's valuation could surge more than 25 times in four years if it goes public at the higher end of its proposed price band.

Write to Jin-seong Kim at Jskim1028@hankyung.com
In-Soo Nam edited this article.