Surge in IPOs in South Korea Exceeds 16% in 2024
Click to start listening
Synopsis
In 2024, the IPOs in South Korea experienced a remarkable growth of over 16%, with total proceeds reaching 3.9 trillion won. Stricter regulations will be introduced for allocation of shares, particularly to institutional investors.
Key Takeaways
- IPOs in South Korea rose by over 16% in 2024.
- Proceeds from IPOs totaled 3.9 trillion won.
- 77 companies debuted, down from 82 in 2023.
- New IPO competition ratio decreased to 775 to 1.
- Stricter IPO regulations to be implemented.
Seoul, Feb 18 (NationPress) The number of initial public offerings (IPOs) in South Korea increased by more than 16 percent in 2024 compared to the previous year, as reported on Tuesday despite ongoing uncertainties. The total funds raised through IPOs reached 3.9 trillion won (approx. US$2.7 billion) last year, an increase from 3.3 trillion won in the previous year, according to data from the Financial Supervisory Service (FSS).
Last year, 77 companies debuted on the main Korea Composite Stock Price Index and the tech-centric KOSDAQ markets, a decrease from 82 companies that went public in 2023, as reported by Yonhap news agency.
The competition rate for IPOs in 2024 was recorded at 775 to 1, down from 925 to 1 the previous year, while the average prices of newly listed stocks saw a notable increase of 42 percent on their first trading day.
The financial regulator has announced plans to implement stricter regulations for IPOs. Starting next year, over 40 percent of IPO shares will be allocated first to institutional investors, who will be required to hold these shares for a specified period, typically three to six months.
Currently, more than 20 percent of IPO shares are sold to these institutional investors to facilitate the smooth entry of new companies into the stock market.
This decision comes amid criticism that some institutional investors have been profiting significantly by selling IPO shares on their debut trading day.
In other market news, shares in Seoul continued to rise on late Tuesday morning, buoyed by gains in technology stocks, amidst worries regarding the consequences of new U.S. tariffs on major industries.
The benchmark Korea Composite Stock Price Index (KOSPI) increased by 4.54 points, translating to 0.17 percent, bringing it to 2,614.96 as of 11:20 a.m.
Recently, the U.S. government imposed a 25 percent tariff on all steel and aluminum imports and released a comprehensive plan to introduce reciprocal tariffs on trading partners.
Furthermore, tariffs on auto imports are set to commence on April 2, which is expected to impact the Korean automotive industry.
Mixed results were seen in large-cap stocks: Samsung Electronics rose 1.4 percent, Hyundai Motor increased by 0.4 percent, and LG Chem gained 0.8 percent.
However, among the decliners, SK hynix, the second-largest chipmaker, fell by 1.7 percent, SK Telecom, a leading wireless service provider, decreased by 1 percent, and discount retailer Emart lost 0.8 percent.
