KB, NH vie for leadership as IPO market heats up

A KB Securities sign is seen in front of its headquarters in Yeouido, Seoul. Yonhap

By Lee Min-hyung

KB Securities and NH Investment & Securities are racing for leadership of the reinvigorating initial public offering (IPO) market as lead underwriters for large-cap affiliates of major conglomerates here.

Among local brokerage houses, the KB subsidiary attracted the largest amount of public subscriptions for eight companies that went public last year. This was worth 13.44 trillion won ($10.52 billion). The performance was fueled by the listing of LG Energy Solution, which accounted for more than 90 percent of KB's total subscriptions.

For now, KB has not closed any IPO deals on the market, but is forecast to expand its footing gradually in the second half, serving as a lead underwriter for LG CNS and LS Materials. The combined market capitalization of the two companies is estimated to reach as high as 6 trillion won after their planned stock listing here.

NH Investment & Securities is also gearing up to widen its presence in the IPO market as a lead manager for the listing of SK ecoplant, which is estimated to be valued in the trillions of won on the benchmark KOSPI. NH came in fifth in its public subscription performance in 2022 with 439.3 billion won.

According to data from the Korea Exchange, Korea Investment & Securities is standing at the top so far this year. The company attracted investments worth 257.5 billion won between the beginning of this year and June 8 for the listing of mostly mid-tier companies. Samsung Securities came in second with 230.1 billion won.

But there stands an ample chance for the overall market sentiment to change drastically in the second half, as more capital is flowing into the local stock market, as was shown by the recent rally of the main bourse and a possible end to the U.S. Federal Reserve's rate hike cycle, according to industry officials.

“The IPO market sentiment remained frozen after big firms with market caps above 1 trillion won dropped their earlier listing schedules repeatedly due to the bearish market sentiment which lasted until early this year,” an industry source said.

“But this appears not to be the case in the second half, with big companies pushing for their IPOs without further delay on hopes for a stock recovery.

The source pointed out that investors' attention will be on the results of Doosan Robotics' listing, after the Doosan affiliate submitted a preliminary examination for an IPO this month.

The company is expected to go public as early as around September. The firm's market cap is estimated to exceed 1.5 trillion won following the IPO. Mirae Asset Securities and Korea Investment & Securities are co-lead managers for the deal.