Kbank to put off Kospi IPO to Jan next year due to market sluggishness

South Korea’s app-based lender Kbank has decided to push back its initial public offering (IPO) to January next year, judging it cannot receive adequate valuation during the market slump when its listed rival KakaoBank Corp.’s stock price is performing 80 percent lower versus a year ago.

According to multiple sources from the financial investment industry on Monday, Kbank recently informed its strategic investors that IPO would be pursued January next year.

Kbank maintained it would stay on course for Kospi debut within the year after gaining preliminary approval in September despite chain IPO cancellations in the second half.

It could have withdrawn upon seeing the epic fall of bigger rival KakaoBank who debuted in August last year in much fanfare by closing the first day at 69,800 won ($49).

KakaoBank shares, trading 6 percent higher Monday at 16,800 won, nevertheless are off 82 percent from its peak of 94,400 last year and nearly halved from its IPO price of 39,000 won.

“A sharp plunge in KakaoBank shares is a big burden to the same industry player readying an IPO,” said an unnamed industry official. “Kbank should build a strategy to differentiate itself from KakaoBank by highlighting Banking as a Service (BaaS) or ties with mobile operators.”

With Kbank’s bow-out, the Korean IPO calendar for big names would end for 2022 as Kurly Inc., operator of nline grocery service Market Kurly, is also contemplating to delay IPO.

Golfzon County already rescheduled its IPO to January next year from December this year.

Ealier this year, Hyundai Engineering, SK shieldus, One Store, and Lionheart Studio. CJ OliveYoung and SSG.com have called off IPO schemes.

Smaller-sized IPOs are not deterred by the sluggish market condition this year because they have less funding options than bigger companies. According to Daishin Securities, 27 companies joined the Kospi and Kosdaq markets in the third quarter, 32 fewer from the same period a year ago but 20 more from the previous quarter.

A total of 48 companies have won preliminary approval from Korea Exchange, similar to the average of 39 in previous years from 1999 to 2021.

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