Korea’s IPO calendar for 2023 packed, with SME debuts

The South Korean initial public offering (IPO) market is heating up in July as a number of small and medium-sized companies are hoping to join the secondary Kosdaq market, including FADU Inc., a local manufacturer of memory and storage systems valued at more than 1 trillion won ($771 million).

According to the Korea Exchange on Tuesday, 14 companies, excluding special purpose acquisition companies (SPACs) and real estate investment trusts (REITs), are holding book building sessions for institutional investors in July.

They include webtoon maker YLAB Corp., ultra-high-frequency mobile communication cable and antenna company Sensorview Co., both of which held book building sessions on Monday and Tuesday, and embedded systems provider COTS Technology Co.

Fourteen companies will receive subscriptions from retail investors.

Secondary battery maker Philenergy Co., YLAB, Sensorview, and Beauty Skin Corp. will receive subscriptions between July 10 and 14. Four will follow suit between July 17 and 21 and six between July 24 and 28.

Ten companies will receive public subscriptions in the last two weeks of July. On July 17, four companies are scheduled for offerings - VIRNECT Co., All Life Technology Co., Curiox Biosystems Co., and Pharos iBio Co.

The IPO market is expected to gain traction this summer.

According to the Korea Exchange, 31 companies joined the stock market in the first half of the year, including eight companies that went public in June. They were valued at a combined 812.8 billion won.

The opening price-to-earnings ratio of the 31 companies stood at a record 72.4 percent, according to Eugene Investment & Securities Co.

“The opening price of some stocks increased significantly as the price fluctuation range was expanded to 60~400 percent on the day of listing starting from June 26,” said Han Byung-hwa, an analyst at Eugene Investment & Securities. “Even before the new price limit became effective, 14 stocks gained 100 percent in the opening price against the offering price.”

The listing of fabless chip maker FADU may further fuel the IPO market this month. FADU will finalize its offering price after a book building session on July 24 and 25 for a listing in August.

The company’s market cap may reach up to 1.49 trillion won given its proposed offering price of between 26,000 won and 31,000 won.

The market, in the meantime, is concerned about overheating under the new price limit.

“We cannot ignore the impact of investor expectations for the new system when looking at the recent high competition rate,” said an IPO manager at a securities firm. “A prudent strategy is needed as the stock price changes dramatically overnight.”