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May 10, 2021

SKIET’s blockbuster IPO marks highest book building competition in history

PUBLISHED : April 26, 2021 - 18:22

UPDATED : April 26, 2021 - 18:22

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A logo of SK ie technology (SKIET)

Amid expectations of surging global demand in the battery separators market, SK ie technology has gained keen attention from investors both at home and abroad ahead of its market debut next month, setting a record on April 26 in South Korean initial public offering market history.

The battery materials subsidiary under SK Innovation wrapped up its two-day book building process Friday. While institutional investors placed bids for new shares for the IPO, a total of 1,734 domestic and foreign institutions participated, according to the company’s announcement via DART, the Financial Supervisory Service’s electronic disclosure board.

The competition marked 1,883 to 1, making it the most competitive book building process among newly listing firms on the local stock market. It was even fiercer than SK Group’s vaccine unit SK Bioscience, which last month logged the best showing in local IPO history at 1,275.47 to 1.

The total value of all bids placed for SKIET’s IPO also marked a record high of 2,417 trillion won ($2,174.64 billion) -- more than double SK Bioscience’s record of 1,047 trillion won.

The share price has been fixed at 105,000 won, at the top end of its indicative price range. The firm previously suggested a share price band of 78,000-105,000 won to raise up to 2.25 trillion won in fresh funding by floating about 21.4 million shares on the nation’s main bourse Kospi market.

“We really appreciate those who participated in our book building process as they’ve highly valued both our position in the battery separators market and our sustainable growth,” SKIET CEO Rho Jae-sok said. “We’re anticipated to see retail investors’ heated interest in our firm’s IPO during the upcoming retail tranche as well.”

With the price per share set, the battery separator maker’s two days of public subscriptions are slated to kick off Wednesday. In response to the intensified book building for institutional investors, the retail tranche may also set a fresh preorder record, according to local market watchers.

Since SKIET’s market capitalization is anticipated to reach up to 7.5 trillion won and is likely to be the last mega IPO deal before a ban on multiple applications for new share subscriptions comes into effect, retail investors will place more bids at several brokerages, they forecast.

As early as the end of June, retail investors will be allowed to place bids in IPO subscriptions through only one brokerage that is underwriting the deal. Last November, the financial authorities rolled out a revised plan to increase the IPO share allocations to small investors by 10 percent to 30 percent, but it soon revised the regulation again.

As of now, half of retail investors’ allocation randomly goes to those who put in the minimum amount of subscription bids and the other half goes to those who put down larger deposits.

Meanwhile, SKIET is set to enter the Kospi market May 11. Mirae Asset Securities and JP Morgan are the main underwriters of the IPO deal, while Korea Investment & Securities, Credit Suisse Securities, SK Securities, Samsung Securities and NH Investment & Securities are also participating as members of the underwriter group.

By Jie Ye-eun (yeeun@heraldcorp.com)

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