The commitment rate of institutional investors to hold shares has nearly tripled over the past year, yet the performance of public offerings has varied significantly. In the second quarter, the average return on newly listed stocks on their first day exceeded 130%, but turned negative in July and August before rebounding to nearly 140% in September, indicating rapid fluctuations in the public offering market.
According to the financial investment industry on October 1, 33 companies (excluding SPACs, KOSDAQ, and relistings) went public in the first three quarters of this year. The average commitment rate among institutional investors for these companies was 27.2%, up from 9.7% during the same period last year, marking an increase of about 2.8 times.
Retail investor interest in public offerings has also been strong. The average competition ratio for general subscriptions in the first three quarters of this year was 1,316.2 to 1, surpassing 976.6 to 1 during the same period last year. Among the 33 newly listed companies, 21 had competition ratios exceeding 1,000 to 1.
The average initial price increase compared to the public offering price was 126.8%, a rise of 61.2 percentage points from 65.6% in the previous year. However, the proportion of companies whose initial prices were set above the public offering price decreased from 85.5% to 75.8% during the same period, suggesting that a few high-flying stocks inflated the overall average.
When examining the timeline, the differences become even more pronounced. In the second quarter, the average return on the first day for eight newly listed companies was about 132%. However, in July and August, the average return for ten newly listed companies plummeted to around -4%, quickly cooling the enthusiasm for public offerings that had persisted through the first half of the year.
The trend reversed in September, with the average return on the first day for six newly listed companies reaching 139.2%. Wise Planet Company saw a staggering 285.83% increase on its first day, while Neosapience and Skylabs rose by 243% and 135%, respectively. All six companies that went public in September closed above their offering prices on their first day.
While the commitment rate has significantly increased to encourage long-term holding by institutions, actual stock prices have fluctuated greatly depending on market conditions after listing. High subscription competition and commitment rates alone make it difficult to predict post-listing returns, highlighting the importance of the public offering price, initial trading volume, and market supply and demand as key factors influencing the performance of newly listed stocks.
The overall size of the IPO market has decreased compared to last year. In the first three quarters of this year, the total amount raised was 1.6312 trillion won, a 52.1% drop from 3.4028 trillion won during the same period last year. The number of newly listed companies also fell from 55 to 33. However, with 16 of the 33 newly listed companies going public in the third quarter, attention is focused on whether the renewed enthusiasm for public offerings in September will continue into the fourth quarter.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.