Daehan Shipbuilding’s IPO draws strong demand ahead of Kospi debut

DH Shipbuilding CI

DH Shipbuilding, a mid-to-large-sized South Korean shipbuilder, has successfully wrapped up its institutional bookbuilding ahead of its Kospi listing, in what may signal a revival of Korea’s trillion-won IPO market.

According to investment banking sources on Monday, a total of 2,106 domestic and overseas institutions participated in DH Shipbuilding’s demand forecasting from July 11 to 17, submitting bids for 1.51 billion shares. The offering was oversubscribed by a ratio of 275.7 to 1. The final offer price was set at 50,000 won ($36.11)—the top end of the indicative range.

The offering will raise around 500 billion won, with DH’s post-IPO market capitalization expected to reach 1.93 trillion won.

Investor confidence was also reflected in lock-up commitments. About 57 percent of participating institutions pledged to hold their shares, with 16 percent committing to a six-month lock-up, 31 percent to three months, and 15 percent to one month.

DH reported strong financial growth last year, with revenue climbing 32 percent year-on-year to 1.07 trillion won and operating profit surging 340 percent to 158.2 billion won.

The company will take retail subscriptions on Tuesday and Wednesday and is scheduled to list on the Korea Exchange on August 1.

Market watchers are hopeful that DH’s momentum will reinvigorate Korea’s sluggish large-cap IPO pipeline, which has been stagnant since LG CNS’s listing.