Krafton IPO priced at top end of $432 apiece on avid foreign demand

Krafton Inc.¡¯s initial public offering (IPO) was priced at 498,000 won ($432), the highest end of its pricy desired band, on eager pursuit by foreign institutions to raise 4.3 trillion won and tower over other publicly trading game stocks on the Kospi as well as making the second biggest IPO from Korea.

Krafton disclosed Thursday that it has priced its IPO of 5,624,000 shares at 498,000 won apiece after a lengthy book building from July 14 to 27.

It would be the second-largest IPO after Samsung Life Insurance at 4.8 trillion won in 2010.

The competition ratio was at 243.1 to 1, lower than that of SK IE Technology with 1,883 to 1, and Kakao Bank with 1,730 to 1. Book runners argued its offering is not comparable as it had selective bulky foreign investors.

Upon listing, its market cap would be valued at 24.35 trillion won, eclipsing over 18.5 capitalized No. 1 gaming stock NCSoft.

The heated demand came from overseas who highly valued the developer of the battle royale title PlayerUnknown¡¯s Battlegrounds for its plan to expand business model based on intellectual property.

On the first day of the session, Krafton received explosive demand led by long-term investors Singapore sovereign wealth fund GIC and BlackRock.

Despite controversy surrounding overvaluation, local institutions also vowed to a lock up period of up to six months.

The institutional demand at home was still relatively subdued ahead of an estimated $10 billion IPO planned by LG Energy Solution IPO in September or October.

Analysts noted that Krafton shares after debut have room for growth to be more than two times higher than major game publisher NCSoft based on first quarter earnings. Shares will gain greater upward momentum in the second half when lockup expires, they said.

The market cap based on the offering price is 24.3 trillion won, the largest as game publisher and 32 percent higher than NCSoft.

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