Kakaobank's 2-day IPO subscription period for retail investors starts Monday
Updated: 2021-07-26 17:01:08 KST
Retail investors are racing to get their hands on shares of Kakaobank.
They can now bid for shares during the 2-day subscription period, which opened at 10 AM on Monday.
Kakaobank,… the mobile-only bank run by South Korea's chat application operator Kakao is getting lots of attention from investors ahead of its debut on South Korea's benchmark KOSPI, slated for Friday, August 6th.
The bank, which has no brick-and-mortar branches, has priced some 65.45 million new shares at around 34 U.S. dollars each.
That is at the high end of its proposed price range for its initial public offering.
During the subscription, half of the shares allotted for individual investors will be distributed equally between those who have made at least the minimum deposit at four brokerage houses.
Critics say the IPO price is overvalued because a relatively small venture in terms of asset size and earnings would become one of the largest financial institutions in the country right after listing.
The CEO of Kakaobank justified the price while saying its nature is different from existing banks as it operates in a new sector.
"We have a very distinct characteristic as a mobile-only bank with a contact-free operation. The structure of operating profit is very different and the expansion of the businesses is also different due to high growth of the platform market."
In two days of book-building last week, bids were taken by institutional investors and the competition was fierce.
1,667 firms tried to obtain shares and the submitted orders were 1,733 times the amount of shares available, making it one of the highest bid ratios ever.
Many investors are anticipating the share price to open at more than twice the IPO price and to hit the daily price rise limit of 30 percent on its first day of trading.
Eum Ji-young, Arirang News.