Hanwha General Chemical, Hyundai Heavy Industries, Lotte Rental all eye August for IPOs

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By Anna J. Park

This summer will be replete with major companies' initial public offering (IPO) events, as Hanwha General Chemical, Hyundai Heavy Industries and Lotte Rental all plan to go public around August this year.

According to the investment banking industry, Hanwha General Chemical is slated to file for a preliminary review for its IPO at the bourse operator Korea Exchange (KRX) later this month. Hanwha General Chemical is aiming to use a fast-track course, as it eyes to go public at the nation's benchmark KOSPI market in the summer.

With the fast-track course, the KRX's preliminary review period shortens the entire IPO process by about a month, as the procedure allows the KRX to complete the preliminary review round in 20 business days rather than the usual 45. Then Hanwha General Chemical could make its offering at the KOSPI as early as August.

Hyundai Heavy Industries is also expected to go public in early August, as the company filed for the KRX's preliminary review for the IPO last Thursday.

The company's preliminary round at the KRX will take the usual 45 business days, as the firm failed to meet the fast-track requirements of recording an annual net profit. Hyundai Heavy Industries logged an annual revenue of 8.31 trillion won ($7.35 billion) and operating profit of 32.5 billion won, yet its annual net profit last year remained negative.

Considering the remaining procedures for the IPO, including securities registration filing, survey for the stock's demand among institutional investors and general stock allotment subscription process, the company could make its debut in early August.

Another major company targeting an August IPO is Lotte Rental. The company is also planning to use the KRX's fast-track procedure to complete the public offering by the summer.

Market watchers say their rush for an August IPO probably aims to avoid unnecessary collisions with the public offering of LG Energy Solution ― the secondary battery unit split off from LG Chem ― which is expected to go public during the second half of this year.

However, due to similarities among the three companies, they will have to arrange their IPO schedules to draw out the maximum demand from local institutional investors, according to a market insider. The three companies not only share a similar timeline for their IPOs, but also their public images somewhat resemble one another, as they are major conglomerates' subsidiaries targeting to go public with a part of the reasons related to the conglomerates' complicated management controls.

“The market awaits a big-time IPO by global game maker Krafton in late June, followed by IPOs of major Kakao subsidiaries such as Kakao Bank and Kakao Pay in July. Thus, the three companies eyeing an August IPO definitely seem to need mutual arrangement for finalizing their KOSPI debuts,” the market insider said.