Korean companies rush to go public ahead of regulation change

South Korean companies are moving to go public on the stock market ahead of the recent revision in the initial public offering (IPO) regulations.

According to the Korea Exchange on Tuesday, three companies received public subscriptions for IPOs on Monday and Tuesday.

All Life Technology Co., a semiconductor post-processing company, achieved a subscription competition ratio of 2,512 to 1, and industrial extended reality (XR) technology company VIRNECT Co. 1,311 to 1.

Pharos iBio Co., an artificial intelligence (AI) drug discovery platform, had a lower competition ratio of 347 to 1 amid the overall downturn in investor sentiment toward bio companies this year.

Sigetronics Inc. launched a two-day book-building session for institutional investors on Tuesday. The manufacturer of special semiconductor materials plans to use the proceeds to become a leader in specialized chips.

“By commercializing power and radio frequency devices that utilize gallium nitride, a compound chip material, we have achieved a breakthrough in the next-generation chip sector,” said Shim Gyu-hwan, chief executive officer of Sigetronics.

Two companies are also slated to join the secondary Kosdaq market.

Ultra-high-frequency mobile communication cable and antenna company Sensorview Co. is scheduled for a listing on Wednesday. In addition to a subscription ratio of 1,568 to 1 for retail investors, the company saw its book-building ratio reach 1,673 to 1.

Webtoon maker YLAB Corp. is set to make its debut on the Kosdaq market on Thursday. YLAB aspires to position itself as a leading company of intellectual property that encompasses video production.

YLAB witnessed overwhelming demand, achieving a subscription of 1,917 to 1.

Market insiders said that the timing of the surge in IPOs is in line with the recent amendment in IPO regulations.

The amendment requires companies and their underwriters to identify whether institutional investors that engage in book-building processes are able to pay subscription funds, a move designed to prevent the investors from placing orders beyond their equity limits.

The regulation applies to companies that have submitted their securities reports after July 1. The companies are believed to have rushed to submit their securities reports before the end of June to avoid the ramifications of the amendment.