K Bank, seen as this year’s first major IPO, posted weaker-than-expected results on the first day of its retail share subscription. Even after setting its offering price at the bottom of the indicated range, investor interest was markedly cooler than during KakaoBank’s 2021 listing.
According to the financial investment industry on the 22nd, subscription deposits collected by lead managers and underwriters NH Investment & Securities, Samsung Securities and Shinhan Investment Corp. totaled about 608.2 billion won as of the close on Feb. 20, the first day of retail subscriptions. By firm, subscription competition ratios were 7.88 to 1, 8.74 to 1 and 45.24 to 1. The number of subscription applications totaled about 320,000.
The contrast with KakaoBank’s 2021 IPO was sharp. KakaoBank drew about 12.0522 trillion won in deposits on the first day and posted a combined competition ratio of 37.8 to 1, with about 960,000 subscription applications.
K Bank set its offering price at 8,300 won, the low end of its indicated range of 8,300 to 9,500 won. The total offering size is 498 billion won, and its expected market capitalization after listing is about 3.3673 trillion won. That is a steep cut from the roughly 5 trillion won valuation discussed during its second attempt to go public.
Analysts say valuation premiums for internet-only banks have been shrinking as the interest-rate environment shifts and household lending rules tighten. A stronger investor focus on profitability and asset quality has also weighed on demand.
Ko Kyung-beom, an analyst at Yuanta Securities, said market expectations for internet banks have fallen during K Bank’s three IPO attempts. He added that a decline in net interest margin, compared with other internet banks, is a key burden.
Attention now turns to the final subscription results on the 23rd. Based on first-day deposits alone, many observers say it will be difficult to expect a breakout hit. While IPO subscriptions often see a late surge on the final day, it remains unclear whether enough money will flow in to quickly change the tone.
Cho A-hae, an analyst at Meritz Securities, said valuation premiums for internet banks are rooted in growth expectations, but recent return on equity has been lower than that of major commercial banks. With a household-loan-heavy portfolio and tighter lending regulations raising the risk of slower growth, Cho said how well the company proves its growth prospects will be a key driver of the stock price.
* This article has been translated by AI.
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