KakaoBank, Krafton, other heavyweights set to sizzle in hot IPO season

South Korea’s initial public offering market is sizzling with KakaoBank Corp. and other big names set to go public in coming weeks amid expectations that their share sales will attract tens of billions of dollars from retail investors looking for fast money.

According to a July 25 tally by Market Insight, the capital news outlet of The Korea Economic Daily, some 9.13 trillion won ($7.93 billion) will be raised through public subscriptions for planned IPOs until the end of August. That’s even higher than 2020’s full-year public fundraising value of 5.75 trillion won.

Industry watchers say a few promising companies could see individuals offer more than 100 trillion won ($87 billion) in total in the coming congested weeks as they are desperate to get as many shares as possible from their subscriptions for windfall gains amid ultra-low interest rates in the capital market.

The IPO market fever has already been flagged with KakaoBank drawing a whopping 2,585 trillion won ($2.24 trillion) in subscriptions during its bookbuilding with institutional investors last week, easily shrugging off IPO valuation concerns of the country’s largest Internet-only bank.

That’s the highest-ever value in bids from institutional investors for a single domestic listing. The mobile banking unit of Korea’s top messaging app operator Kakao Corp. was 1,700 times oversubscribed, attracting bids from about 1,800 institutions at home and abroad.

KAKAOBANK TO OPEN IPO FLOODGATE

KakaoBank is receiving requests for an estimated 2.55 trillion won in share offerings from retail investors for two days from July 26.

Scheduled for a market debut on Aug. 5, the mobile banking platform is expected to rank as the country's third-largest financial services firm upon listing.

KakaoBank’s IPO will be followed by Krafton Inc., touted as this summer's biggest IPO as it seeks to raise as much as 4.31 trillion won from retail investors.

Krafton, the developer of the multiplayer battle game PlayerUnknown's Battlegrounds (PUBG), is holding a public subscription Aug. 2-3.

If priced at the top end of its proposed offering price, it will become the country’s second-largest IPO, after Samsung Life Insurance Co.s’ 4.9 trillion won offering in 2010.

Other mega-IPOs scheduled in coming weeks include HK inno.N Corp., which plans to raise 850.8 billion won from its public offering, and Lotte Rental Co., which expects to raise 596.9 billion won.

HK inno.N, known for its top-selling anti-hangover CONDITION drink, is set to receive subscriptions from individual investors July 29-30, while Lotte Rental, Korea’s largest car rental company, will hold its public subscription Aug. 9-10.

High-profile IPOs slated for July and August

Company Name	Public Subscription Date	Deposit Refund Date
KakaoBank	July 26-27	July 29
Hanwha Plus No. 2 SPAC	July 26-27	July 29
HK inno.N	July 29-30	Aug. 3
Wanted Lab	Aug. 2-3	Aug. 5
Krafton	Aug. 2-3	Aug. 5
Hancom Lifecare	Aug. 5-6	Aug. 10
Aju Steel	Aug. 9-10	Aug. 12
Brainz Company	Aug. 9-10	Aug. 12
Lotte Rental	Aug. 9-10	Aug. 12

FIRST-DAY RALLIES UNLIKELY

The back-to-back IPOs, however, may not lead to sharp rises in share prices upon listing, common in the past with some big names opening at double their IPO price on debut and hitting the daily 30% limit high on the first day.

“Retail investors won’t likely see such big share price jumps as they did before. Their expectations have been lowered amid the controversy over some IPO companies’ valuations,” said an executive at a local brokerage firm.

In the past few weeks, the country’s financial regulator, the Financial Supervisory Service, warned against inflated valuations of a series of planned IPOs, asking companies to slash their initial share sale prices to correctly reflect their business fundamentals.

Kakao Pay Corp., the digital settlement platform unit of Kakao Corp., last week became the third Korean company in a month requested to adjust its IPO prospectus.

Earlier this month, Krafton cut its IPO price range following a regulatory request.

Likewise, COVID-19 test kit maker SD Biosensor Inc. had to lower its IPO band by 40% from its initial guidance, as advised by the regulator.

The company made a modest market debut in mid-July, defying market expectations that it would repeat the first-day rallies of recent high-profile IPOs.

SANDWICHED BETWEEN IPO BLOCKBUSTERS

Some lesser-known companies are also set to go public over the next couple of months, raising the possibility of losing market attention to their bigger rivals such as IPO blockbusters KakaoBank and Krafton.

Hanwha Plus No. 2 Special Purpose Acquisition Co. (SPAC) is scheduled for a public subscription on the same days as KakaoBank, July 26-27.

Wanted Lab, a local referral-based recuring platform, is getting requests from retail investors for its share offering Aug. 2-3, the same as Krafton.

A total of 13 large and small companies are set for public subscriptions to their IPOs from the final week of July through the second week of August.

Write to Jin-seong Kim, Ye-Jin Jun and A-Young Yoon at Jskim1028@hankyung.com
In-Soo Nam edited this article.