HD Hyundai Marine Solution Co.'s debut on the Kospi, South Korea's largest initial public offering in more than two years, saw a near-doubling of stock price on its first trading day.
The company, the vessel maintenance and aftermarket service unit of Korea’s top shipbuilding group HD Hyundai Co., saw its share price rise 96.5% to close at 163,900 won ($120.2) on Wednesday.
Banking sources forecast that HD Hyundai Marine’s stock would continue to rise as some 92% of Korean institutional investors who participated in bookbuilding agreed they wouldn’t sell the shares for at least 15 days following the first trading day. The investors expect the stock to be included in the Kospi 200 Index and benefit from an influx of passive funds, sources said.
After listing, HD Hyundai’s ownership in the vessel maintenance unit dropped from 62% to 55.8%, while the second-largest shareholder KKR & Co.’s stake decreased from 38% to 24.2%.
HD Hyundai Marine’s market cap increased to 7.29 trillion won based on its closing price on Wednesday, the 53rd-largest on the Kospi. The market cap was expected to be 3.71 trillion won based on the offer price, the biggest since LG Energy Solution Ltd.'s listing in January 2022.
Korea Exchange CEO Jeong Eun-bo (left) and HD Hyundai Marine Solution CEO Lee Ki-dong celebrate HD Hyundai Marine's Kosdaq debut on May 8 (Courtesy of KRX)
ADDITIONAL RISE EXPECTED
Domestic institutional investors, who were inclined to sell shares on their first trading day, net bought 139.7 billion won worth of HD Hyundai Marine stock on Wednesday. Individual investors and foreigners net sold 80.5 billion won and 56.2 billion won worth of the shares, respectively.
The company’s market debut stands out as many local firms listed since April have seen lower rises of their stock price on the first trading day, compared with those that went public at the beginning of this year.
Mintech Co., an energy storage system inspection firm listed on the Kosdaq last month, saw its stock climb 22.7% on the market debut day.
Battery manufacturing equipment maker Jeil M&S Co., biotech D&D Pharmatech Inc., and secondary battery maker Korchip Corp., which were listed on the Kosdaq earlier this month, posted 22.7%, 10.6% and 58.1% increases, respectively, in their stocks on their first trading day.
That compares with a roughly 300% surge of Woojin Ntec Inc., a nuclear power plant equipment maintenance firm, and shipbuilding components maker Hyundai Hyms Co. which were listed on the Kosdaq in January.
Market insiders said that relatively expensive offer prices have limited the jump in stock prices on the first trading day. Many firms that went public this year set their offer prices at 25% to 30% higher than the upper price band.
Offer prices have been increased as private equity firms and brokerages tend to raise the offer price to maximize existing shareholders’ interests and local institutional investors’ competition for subscriptions is heated for capital gain.
Write to Jeong-Cheol Bae at bjc@hankyung.com Jihyun Kim edited this article.
