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| Doosan Robotics' A Series collaborative robot arm / Courtesy of Doosan Robotics |
By Lee Min-hyung
More companies are opening public subscription of shares ahead of their planned initial public offerings (IPOs), as corporate demand for fundraising grows faster amid long-lasting macroeconomic uncertainties here and abroad.
According to the Korea Exchange, a group of around 10 companies are scheduled to jump into pre-IPO procedures in September. The number exceeds the average of seven for the same month between 1999 and 2022.
This raises hopes for the revitalization of the local IPO market for the year after a number of companies postponed their bids for going public due to the sluggish stock sentiment. Even if the benchmark KOSPI and secondary Kosdaq have yet to join a stable recovery track, the overall sentiment has turned more optimistic this year, as was shown by the growth of the two representative stock indexes.
Doosan Robotics, a robot manufacturer, plans to conduct demand forecasting with institutional investors for five days from Sept. 11, and hold its general subscription of shares on Sept. 21 and 22. The company is valued at as high as 3 trillion won ($2.27 billion) in the market.
Shinsung ST, a secondary battery components manufacturer, is also set to go public in October after ending its public subscription for shares during the same period as the Doosan affiliate. The firm's planned IPO is considered timely, as investors pay growing attention to secondary battery-linked shares amid global sensation for electric vehicles.
Industry officials said the outcome of Doosan Robotics' subscription will determine the overall IPO market sentiment until the end of this year.
"If the company attracts better-than-expected attention from investors and the market, this will have positive impacts across the local IPO market, as no other companies have done so far this year," an investment industry source said.
But it still remains unclear whether the firm's IPO will make a hit, as the company still reports lukewarm earnings. Doosan Robotics reported an operating loss of 9.9 billion won in the first half. Its total operating loss last year also came in at 13.2 billion won. The firm's sales are on the rise, but its profitability remains weak due to its expanded expenditure on research and marketing.
The de facto end to the global monetary tightening cycle, however, is widely expected to add more vigor to the IPO market here.
The main bourse is on the recovery track after having faced an adjustment period in mid-August. As the U.S. Federal Reserve is not forecast to return to its earlier hawkish rhetoric, expectations are that more capital will flow into the stock and other forms of asset markets.
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