Money raised through IPOs hits record high in 2021 amid ample liquidity, bullish sentiment

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The amount of money Korean firms raised through initial public offerings (IPOs) more than quadrupled last year to hit a record high thanks to ample liquidity and the overall bullish stock market sentiment, data showed Monday.

Eighty-nine companies went public in 2021, listing shares on the benchmark KOSPI and secondary tech-heavy Kosdaq markets and raising a combined 19.7 trillion won ($16.4 billion), according to the data from the Financial Supervisory Service.

The money raised from IPOs represented a 333.9 percent surge from 4.5 trillion won a year earlier, the data showed. The number of companies whose shares listed on the stock markets for the first time also jumped from the previous year's 70.

The IPO market was driven by the overall rise in local stock markets and ample liquidity injected into the economy bolstered by low borrowing costs in line with record low policy rates intended to boost the COVID-19 pandemic-hit economy.

Investors became more interested in new listings, with the competition ratio for IPO stocks jumping to an average of 1,136-to-1 last year, up from the 956-to-1 ratio a year earlier.

The prices of newly listed stocks closed 57.4 percent higher on average on their first trading day, compared with their IPO prices. The return marked the highest in five years, the data showed.

Their average prices also jumped 54.8 percent at the end of last year from the IPO listing; but of the companies that went private, 28, or 31.5 percent, saw their stocks fall below the IPO price at the end of last year, the data showed. (Yonhap)