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Kakao Bank IPO draws tepid response from retail investors

written by Bella Palmer

Last week, Kakao Bank set its public offering price at $33.79, hoping to raise $0.0022 trillion via its listing at the main bourse

South Korean internet-only bank Kakao Bank Corp. is set to draw relatively low subscription from retail investors for its initial public offering (IPO), with deposits for the stock offering at a smaller-than-expected 22 trillion won ($19.1 billion) as of 11 a.m., its IPO managers said Tuesday.

Retail investors may pour additional deposits to subscribe for one of the largest IPO deals on the last day of the two-day subscription.

Kakao Bank's IPO subscription for individual investors closes at 4 p.m.

Last week, Kakao Bank set its public offering price at 39,000 won ($33.79), hoping to raise 2.55 trillion won ($0.0022 trillion) via its listing at the main bourse on Aug. 6.

The total figure is smaller compared with those of other big-name companies that went public this year, such as SK IE Technology Co. and SK Bioscience Co., which raised 43.8 trillion won ($0.038 trillion) and 33.9 trillion won ($0.029 trillion) in subscription deposits, respectively.

Kakao Bank said the subscription is notably picking up the pace on the second day, noting that investors are waiting to figure out the lowest competition rate among the five IPO advisers.

Via the IPO, Kakao Bank's capitalization may reach 18.6 trillion won ($0.016 trillion) upon the market debut, far higher than some 13 trillion won ($0.011 trillion) for Hana Financial Group Inc. and nearly 8 trillion won ($0.0069 trillion) for Woori Financial Group Inc. -- two of South Korea's four major financial holding firms.

Kakao Bank, led by Kakao Corp., the operator of the country's dominant messaging app KakaoTalk, has gained popularity among mobile-savvy customers in recent years due to its around-the-clock service and convenience.


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