Korean companies mull over prime time for their IPOs Issuers try not to overlap with LG Energy Solution's IPO scheduled for early next year

Translated by Kim So-in 공개 2021-10-21 08:07:08

이 기사는 2021년 10월 21일 08:03 더벨 유료페이지에 표출된 기사입니다.

South Korean companies are waiting to see when to make their stock market debuts after the country's top battery maker LG Energy Solution (LGES) has pushed back its initial public offering (IPO) to early next year.

Major issuers in the pipeline that plan to go public next year are paying attention to LGES’ IPO date as they are trying not to overlap their listings with that of LGES, industry sources said on Tuesday.

The South Korean IPO market has been booming this year thanks to numerous mega-deals, including SK Bioscience, SK IET, KakaoBank, Krafton, and Hyundai Heavy Industries.

Even though LGES has postponed its listing, which was considered the largest ever in Korea, to next year, the Korean market is poised to see proceeds from IPOs exceed 20 trillion won ($17 billion) this year for the first time.

The trend is expected to continue, with Hyundai Engineering, Hyundai Oilbank, ONE Store,, and CJ Olive Young planning to go public next year, mostly in the first half.

They are mulling over the prime time of their planned IPOs as they don’t want their IPO overlap with that of LGES. Many mega-IPOs have already been pushed back or moved up in a bid to avoid LGES’ initial IPO date in the second half of this year.

It may be unfavorable for companies that aim similar timelines with LGES as institutional investors may be less active in deals prior to that of LGES to save more for the LGES’ listing. Institutional investors tend to agree to a lock-up provision to get more IPO shares.

It is also worrisome that the current liquidity-led market is coming to an end. The market liquidity conditions have been strong enough this year to cover blockbuster deals, but such environment is likely to end soon amid rising interest rates and the global inflationary pressure.

Mega-IPOs in the pipeline may be disrupted if LGES absorbs significant amount of money early next year through its listing.

However, analysts expect big deals to have enough time to attract strong interest as LGES plans to go public early next year. It is important for those issuers to get preliminary approval from the Korea Exchange for their planned IPOs as early as possible to have an edge over rivals. (Reporting by Seok-cheol Choi)
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