'IPO Market Faces Withdrawals and Delays Amid Public Offering Slowdown and Political Instability'

IPO Companies Face Withdrawal or Postponement Surge
Most Fall Below Offering Price After Listing... "Intensified Selection"
"Stock Market Rebound Needed for IPO Market Success"

The initial public offering (IPO) market has fallen into a slump. The market downturn continues, and uncertainty has increased due to the impeachment political situation. Securities firms pointed out that a rebound in the stock market is necessary for the public offering market to recover.

According to the financial investment industry on the 11th, IST, a semiconductor equipment specialist company, announced through a disclosure that it has decided to withdraw its listing on KOSDAQ. This decision was made considering the prolonged instability of the domestic stock market and the contraction of the public offering market. They plan to reorganize and then reinitiate the listing process based on market conditions.

Companies submitting withdrawal reports after pursuing IPOs are increasing. Orum Therapeutics, CK Solution, and Meatbox Global have submitted withdrawal reports. Also, K-Bank, considered a major player, withdrew its listing in October this year due to poor demand forecasting. SGI Seoul Guarantee also postponed the submission of its securities registration statement to next year after initially planning to go through the public offering process within this year.

Along with this, poor performance is also appearing in demand forecasting. AI platform company Oncocross had a desired public offering price range of 10,100 to 12,300 KRW but was decided at 7,300 KRW. Additionally, M&C Solution, a defense motion control parts specialist, had a desired public offering price range of 80,000 to 93,300 KRW but was priced below the lower limit at 65,000 KRW.

Companies failing to exceed their public offering price after listing are also increasing. From last month to this month, excluding SPACs, a total of 13 companies including Alux, Theborn Korea, and Toprun Total Solution have been listed. Among them, only Witz, which was listed on the 20th of last month, is trading above its public offering price. Witz’s public offering price was 6,400 KRW, and its closing price the day before was 13,400 KRW.

Changhee Lee, a researcher at Samsung Securities, explained, "Following September and October, the IPO market in November is also experiencing a sharp decline in stock prices on the listing day," adding, "Although the competition rate for demand forecasting among investors is increasing, the ratio of lock-up commitments is weak, which is judged to be a side effect of short-term investment forms."

Jongsun Park, a researcher at Eugene Investment & Securities, also analyzed, "As market volatility increases, general investors’ interest in the IPO market is weakening," and "The phenomenon of ‘picking the wheat from the chaff’ regarding stocks has intensified."

It is interpreted that the recent sluggish stock market is also having an impact. Recently, KOSPI and KOSDAQ have continued their downward trend. Since the emergency martial law incident on December 3rd, stock market volatility has increased. This month, KOSPI has fallen 1.55% compared to the previous month, and KOSDAQ has dropped 2.45%, continuing the downward trend. Researcher Changhee Lee said, "Due to structural problems in the demand forecasting market system, volatility in the domestic IPO market is expected to expand for a while," and added, "The success of the IPO market seems to require a preceding rebound in the domestic stock market indices."