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September 19, 2021

KakaoBank’s blockbuster IPO draws record-breaking bid

PUBLISHED : July 25, 2021 - 15:36

UPDATED : July 25, 2021 - 15:36

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KakaoBank’s Pangyo office in Gyeonggi Province (KakaoBank)

KakaoBank, South Korea’s largest internet-only bank, set a record on July 22 in the initial public offering market history here, having attracted keen attention from investors both at home and abroad ahead of its market debut on the country’s main board Kospi next month.

The banking arm of mobile giant Kakao wrapped up its book-building process on July 21. While institutional investors placed their bids to obtain new shares for the IPO, a total of 1,667 domestic and offshore institutions participated, according to the firm’s announcement via DART, the Financial Supervisory Service’s electronic disclosure board.

The competition marked 1,733 to 1 as the total value of all bids placed for KakaoBank’s IPO came to an all-time high of 2,585 trillion won ($2.25 trillion), surpassing the previous record set by SK ie technology with 2,417 trillion won in April.

The share price has been fixed at 39,000 won, at the top end of its indicative price range of 33,000-39,000 won.

“We would like to express our deep gratitude to institutional investors who have acknowledged our growth potential and differentiation strategies,” Yun Ho-young, chief executive officer of KakaoBank said. “We’re looking forward to see more potential investors’ attention and support during upcoming public subscription.”

The online banking unit is anticipated to raise up to some 2.55 trillion won since competition among retail investors are also expected to heat up.

The nation’s largest IPO in history is Samsung Life Insurance’s 4.89 trillion won, followed by game firm Netmarble’s 2.66 trillion won.

Market insiders forecast KakaoBank’s valuation after listing to reach around 18.53 trillion won, which is likely to become the third-most valuable stock in the local finance sector, in terms of the size of market capitalization. As of July 22’s closing, the values of KB Financial Group and Shinhan Financial Group stood at 21.54 trillion won and 19.86 trillion won, respectively.

Aiming to go public on Aug. 6, the company’s two-day retail tranche is set to wrap up on July 27. Of 475.1 million shares floated, it plans to issue 64.45 million new shares. KB Securities and Credit Suisse Securities are the lead underwriters of the mega IPO deal.

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

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