IPO Fundraising Nears 12 Trillion Won This Year... Nearly Sixfold Increase

[Asia Economy Reporter Ji Yeon-jin] The scale of fundraising through Initial Public Offerings (IPOs) reached 12 trillion won up to last month this year, nearly six times higher than a year ago.

According to the direct financing performance of companies in September announced by the Financial Supervisory Service on the 27th, IPO performance from January to September this year amounted to 11.9202 trillion won. This represents a sharp increase of 478.3% from 2.0612 trillion won during the same period last year.

It is interpreted that companies flocked to the IPO market as liquidity increased due to COVID-19 last year flowed into the stock market, and a new term "ttasang" (meaning the opening price is formed at twice the public offering price and then closes at the upper limit) emerged, sparking a frenzy of public offering investment.

Cumulative paid-in capital increases also rose 220.8% year-on-year to 11.2803 trillion won up to last month.

During this period, corporate bonds increased by 15.5% to 21.4449 trillion won issued. While general corporate bonds (41.175 trillion won) and financial bonds (107.3535 trillion won) increased by 12.6% and 23% respectively, ABS (11.0427 trillion won) shrank by 24.9%.

In particular, corporate bond issuance by large corporations increased by 12.2% to 40.983 trillion won this year, and small and medium-sized enterprises (SMEs) increased by 284% to 142 billion won. However, in the case of stock issuance, large corporations (19.4216 trillion won) surged by 473%, whereas SMEs (3.7789 trillion won) only increased by 72.62%. As a result, the proportion of stock issuance by large corporations expanded from 60.8% last year to 83.7% this year.

However, fundraising through stock issuance last month totaled 2.0349 trillion won (23 cases), which was halved (54.5%) compared to the previous month (22 cases, 4.4741 trillion won). Although the scale of paid-in capital increase was 586.3 billion won, up 199.9 billion won (51.7%) from the previous month, IPOs decreased sharply by 64.6% from 2.6391 trillion won in August to 1.4486 trillion won. The number of IPO cases last month was 14, more than the previous month (12), but except for Hyundai Heavy Industries, the other 13 cases were companies listed on KOSDAQ through SPACs or with fundraising amounts under 100 billion won.

Last month, the scale of corporate bond issuance totaled 17.5894 trillion won, an 18.2% increase compared to the previous month (14.8858 trillion won), and issuance of general corporate bonds (14 cases, 4.95 trillion won) surged by 698.4%. Among general corporate bonds, non-investment grade bonds accounted for half (49.9%) of the total issuance last month. Financial bonds (172 cases, 11.642 trillion won) issuance decreased by 5.9% compared to the previous month, and ABS (40 cases, 997.4 billion won) fell by 47.3%.