Securities firms become selective amid series of IPO plans

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By Anna J. Park

As a series of big-name companies are announcing their plans to make their debuts on the country's stock markets in the near future ― later this year or early next year ― local brokerage firms have become more selective than ever over the role of underwriting the IPO process.

The signs of such selective attitudes are the most evident in the IPO plans of e-commerce companies. Currently, Market Kurly, Oasis, SSG.com and Tmon are all aiming to go public sometime early next year.

As the four e-commerce companies are targeting similar timelines for going public, major brokerage houses here have the upper hand in the IPO process. They're able to select and focus on one of the companies' underwriting processes, rather than competing fiercely to be selected by the e-commerce companies.

Oasis Market has partnered with NH Investment & Securities and Korea Investment & Securities for its IPO plan, as its corporate value was recently estimated at over 700 billion won ($611 million) after attracting its latest investment.

With its latest corporate value from a Series F round standing at 2.5 trillion won, Market Kurly was supposed to finish selecting its lead manager and underwriters for the IPO. However, only KB Securities is said to have responded to its request for the underwriting bidding, which was sent to diverse brokerage houses, including Mirae Asset Securities, Samsung Securities and KB Securities.

The de facto refusal by big players like Samsung and Mirae Asset is interpreted as their focus on the IPO of SSG.com, which seeks to go public following a similar timeline as Market Kurly. Against this backdrop, Market Kurly did not select its underwriters at this time.

Market insiders say that if the e-commerce companies' IPO timelines had been well-aligned, brokerage firms would've competed fiercely to be selected as the underwriters. Yet the current bottleneck schedule hindered them from competing for the bids. So, the securities firms each decided to focus on just one of the companies that they will partner with.

Besides the e-commerce market, a series of big-name companies, like Krafton, LG Energy Solution, Kakao Pay and Lotte Rental, are all aiming to go public this summer or early autumn. Mirae Asset Securities is expected to continue its leading position in the local underwriting market during the second half of this year, as it is scheduled to participate in 16 companies' IPO processes, including: Krafton, Hyundai Heavy Industries, Netmarble Neo and Aju Steel. Mirae Asset Securities was also the top brokerage house in the first half of this year, participating in 12 major IPOs, including those of SK Bioscience and SK IET.

NH Investment & Securities is following Mirae Asset's lead, as it is involved in 14 IPO schedules during the second half of this year. The company is facing the imminent IPOs of Lotte Rental and K Car. KB Securities is cited as one of the top beneficiaries from its IPO management of LG Energy Solution as well as the successful Kakao Bank IPO. Samsung Securities' Kakao Pay IPO is also another big-name IPO that is drawing a lot of interest from investors.