[IPO Underwriting Competition] The Rise of 'Gamechanger' KB Securities③

The year 2021 marks the biggest boom in the initial public offering (IPO) market in history. This year, 62 companies entered the stock market, and the total amount raised through public offerings exceeded 17 trillion won. Securities firms earned fee revenues worth several hundred billion won solely from underwriting, acquisition, and subscription processes of IPOs. The profits generated from the influx of funds into the public offering market are also enormous. Consequently, the competition among securities firms to underwrite IPOs is fiercely intense. With a series of IPOs scheduled after Chuseok, the rankings of IPO underwriters are also becoming clear.

[Asia Economy Reporter Lim Jeong-su] KB Securities, which has held the undisputed No. 1 position in the corporate bond market for over a decade, is showing remarkable performance in the IPO sector this year as well. After merging with Hyundai Securities, it struggled with a prolonged slump in IPO performance but began to reap the fruits of sustained investment as the stock market entered its greatest boom following COVID-19.

According to the investment banking (IB) industry on the 22nd, KB Securities has handled IPO underwriting worth a total of 1.55 trillion won so far this year, helping 11 companies enter the stock market. The decisive factor was underwriting KakaoBank’s public offering, which amounted to 2.55 trillion won, contributing 940 billion won to its underwriting performance. KB Securities also served as a joint underwriter for the KOSPI listings of Hyundai Heavy Industries, Lotte Rental, and SoluM.

In particular, leveraging synergy with KB Financial Group, KB Securities shone in discovering small and medium-sized enterprises (SMEs). It underwrote the KOSDAQ listings of prominent companies such as Platier, YM Tech, Deepnoid, and Raontech. For the KOSDAQ listings of LBRUSHEM and VigenCell, it acted as a joint underwriter alongside Korea Investment & Securities and Daishin Securities.

Showing strength in SME IPOs, KB Securities ranks third in the number of underwriting cases, following Mirae Asset Securities (17 cases) and Korea Investment & Securities (16 cases). It is evaluated as achieving solid results by evenly underwriting both large corporations and SMEs. An IB industry insider commented, "They are effectively identifying the funding needs of SMEs by utilizing the corporate loan network of their affiliated bank and the group’s capabilities."

Despite continuous investments in the IPO sector and support at the KB Financial Group level after merging with Hyundai Securities, KB Securities had to be content with underwriting performances averaging between 200 billion and 400 billion won annually. Before the COVID-19 outbreak, in 2018 and 2019, it only managed underwriting performances of about 220 billion won per year. This year, it has achieved underwriting results 5 to 8 times higher than usual in just about nine months.

KB Securities has also been named the lead underwriter for LG Energy Solution, whose market capitalization is expected to reach 100 trillion won. If LG Energy Solution goes public within this year, KB Securities will immediately rise to the top tier.

A KB Securities official explained, "Even during the IPO downturn, we did not reduce investments and continued to increase specialized personnel. Establishing industry-specific professional sales teams and building an efficient deal sourcing pipeline led to these results."