Korean IPO pipeline drying up as more mulling to put off their plans

[Source: Market Kurly]

A series of major IPO withdrawals in Korea could unsettle the plans by highly-anticipated platform candidates Market Kurly and SoCar to go public this year and dry the pipeline that had been sizzling hot over the last two years.

Korea’s pioneering car-sharing platform SoCar passed the Korea Exchange’s preliminary review on its listing plan last month

SoCar’s original plan was to submit an IPO prospectus sometime in May but the time may be pushed back after big IPO candidates called off their plans.

The company’s enterprise value is estimated at 2 ($1.5 billion) to 3 trillion won.

Kurly, the operator of overnight fresh food delivery app Market Kurly, has been an highly anticipated IPO for the second half of the year. Kurly filed for IPO preliminary review on March 28 and is waiting for results.

Kurly with an estimated value of 5 to 6 trillion won is expected to get a nod as an exceptional unicorn case.

Korea enables promising startups still in the red to go public on the Kosdaq market if they meet certain requirements such as a minimum 50 billion won market cap, or more than 3 billion won revenue a year before listing, or average sales growth of more than 20 percent.

In another special case, a startup with a market value of more than 50 billion won that receive an A grade for technological evaluation from one outside evaluation agency can file for preliminary review.

Fast-track IPO won’t likely offer big relief due to the grim market conditions this year.

So far this year, Hyundai Engineering, SK shieldus, Tailim Paper, and One Store withdrew their IPO plans. Last year’s blockbuster IPOs are performing poorly, adding to disillusionment over IPOs.

According to Yuanta Securities, of 107 companies that went public on the Kospi and Kosdaq markets since last year to April this year, 76 firms are underperforming the Kospi and the Kosdaq indices.

Other companies in the IPO pipeline this year such as Hyundai Oilbank, Kyobo Life Insurance, Kakao Mobility, and CJ Olive Young are also reviewing whether to go ahead with their IPO plans.

Companies such as Nextchip, HPSP, Golf Zone Commerce, and OSP are preparing to go public on the Kosdaq market.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]