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| K bank headquarters in central Seoul / Courtesy of K bank |
By Anna J. Park
K bank has decided to delay its initial public offering to early next year, amidst worsening investor sentiment and growing market concerns.
According to the financial industry Monday, the country's first internet-only bank has recently notified its financial investors that it would change its target timeline for the IPO to January. Since passing the preliminary examination for the listing in September, the digital bank has been known to be aiming to complete the IPO process within this year.
Market watchers view that the recent stock price plunge of KakaoBank, one of K bank's main competitors, partially influenced the internet-only bank's decision to delay its IPO. They point out that the stock price plunge of the representative peer company of K bank must have placed a big burden on its IPO.
KakaoBank's stock price fell recently to lower than half its initial subscription IPO price of 39,000 won ($27). The stock price hit its lowest level of 15,800 won in late October, which is a huge nosedive from its highest price of 94,400 won logged in mid-August last year shortly after its IPO.
K bank faces pressure to differentiate itself from KakaoBank, in order to be favorably evaluated for its value in the local stock market.
Other major IPO candidates previously aiming to go public within this year, such as Kurly and Golfzon County, are also expected to delay going public until next year.
Throughout the year, the local stock market has witnessed IPO plans canceled by many solid companies, including Hyundai Engineering, SK Shieldus, ONE store and Lionheart Studio, even after submitting their prospectus hoping to complete the listing process within this year. Other major retailers such as CJ OliveYoung and SSG.com also delayed or halted their listing plans, reflecting unfavorable market conditions.
While big-time players have decided to wait for better market conditions for proper appreciation of their corporate values in IPOs, small and medium-sized companies tend to go public as planned, given an increased difficulty in issuing corporate bonds.
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