Even after the presidential election where the market and economy are uncertain, there is a sign of weak conditions affecting equities sizable deals in South Korea. Market sentiment led to the weak situation, IFR Asia even argued that even coming to the first half, the IPO postponement is getting real. The weak market price is below range.
There are at least three Korean IPOs delayed in March this year.
One of them is Voronoi, a biotech company. Before, the company delayed IPO due to the presidential election but a few weeks later, after the election, it continued to delay IPO up to W130bn. Voronoi becomes the first company in South Korea delaying IPO in the first quarter. According to the company, they see challenging conditions affecting the value appraisal that’s why they have withdrawn the exchange float.
Hyundai Engineering, a construction company, canceled its IPO for as much as W1.2trn. Daemyung Energy, a renewable energy power plant operator, followed. Daemyung Energy canceled its W130.5bn float in January, and continued to cancel in February. The reason is they believe that investors do not properly value the companies.
Voronoi alone made 2m new shares in an indicative price range of book building as much as W50.000-W65.000. The shares were due on March 30. Two securities led the float; Korea Investment & Securities as well as Mirae Asset Securities. Although the condition is weak, South Korea waits for a large IPO at the right moment.
Kakao Mobility, the car-hailing service for instance, raised around $1bn to list in the first half. Unfortunately, the company struggles to battle weak market conditions, that’s why they cannot stick to the plan. Acknowledging the continuous weak condition, IPO plans to postpone the second quarter listing. Small IPO is even priced below the range, it is just not good at all, said a banker.
