Hanwha Systems said Nov. 1 it plans to raise 402.6 billion won ($344.9 million) in its initial public offering as it received a lukewarm reception from institutional investors.

The IPO of the ICT arm of defense-to-financial conglomerate Hanwha was earlier touted as possibly fetching up to 460 billion won -- 14,000 won per share. NH Investment & Securities, Korea Investment & Securities and Citigroup Global Markets Korea Securities are underwriters for the IPO.

According to the firm, its offering price for some 32.9 million shares has been set at the lower end of the marketed price band -- 12,250 won per share -- in an institutional tranche that ended Oct. 30.

Of the total, three out of five shares were 23.61 times subscribed by 719 institutional investors at home and abroad, Hanwha Systems said. Over half of the institutional investors took the bid price lower than 12,500 won per share, according to a regulatory filing.

Of the remaining, one-fifth will be up for sale for retail investors Nov. 4-5, and the other one-fifth will be assigned to its employee stock ownership plan.

The IPO proceeds will be used to create a new data center and develop a personal aerial vehicle -- also known as an air taxi -- Hanwha Systems said.

Hanwha Systems plans to start trading on the national stock market’s main board Kospi on Nov. 15.

As a subsidiary of Hanwha Aerospace, Hanwha Systems’ net profit in 2018 rose nearly threefold on-year to 41.2 billion won. Its operating profit in 2018 also jumped 44.9 percent on-year to 44.8 billion won.

By Son Ji-hyoung (consnow@heraldcorp.com)