In less than a week, South Korean IPO candidates canceled their deals. It adds to market uncertainty in the listing pipeline. Three of the candidates; Onestore, Tailim Paper and SK Shieldus, have pulled the deals. Onestore is a mobile app operator and Tailim Paper is a fiberboard maker. Both of them have scrapped W279bn and W178bn of IPO respectively. The security device maker, SK Shieldus also dropped its W1trn IPO deal previously. A ECM banker said institutional investors flock to Southeast Asia but not to South Korea.
According to Onestore and Tailim Paper, market conditions are difficult to project. So it is hard for investors to evaluate the companies accordingly. Many investors pulled their orders due to global stock markets suffering from severe losses. This makes the issuer consider to lower the price range to survive in the situation. But in the end, they just pulled the deal together.
One Store marketed 6.7m shares (70.9% primary/29.1% secondary), said IFR Asia. This is in an indicative price range of W34.300-W41.700 each. The market capitalization is W914bn-W1.1trn. Talim Paper however priced 8.1m shares covering 4.68m primary/3.24m secondary). The indicative price range is W19.000-W22.000.
Basically, South Korean IPO is famous as the world’s largest IPO. Electric vehicle battery maker, LG Energy Solution listed with W12.8trn. So, it is not to question that investors are seeing great opportunities in the bloc. However, since there are many IPO cancellations, they reevaluate the timeline.
South Korea’s benchmark Kospi Composite Index plunged 14.7%. It happens due to the rise of interest rates as well as Russia’s invasion of Ukraine. It impacted other large IPOs like Kakao Mobility and Hyundai Oilbank. They delayed the IPO to see whether the situation could be better. Kakao has planned as much as a $1bn deal while Hyundai was $2bn.