Investors have requested shares of LG Energy Solution, worth a record 114 trillion won, 96 billion dollars, in the South Korean battery maker’s IPO. According to the company, approximately 4.4 million individual investors ensured that the retail portion of the initial public offering was underwritten nearly 70 times in excess at the end of the two-day offering period.
Demand broke battery material manufacturer SK IE Technology‘s previous record, which hit 81 trillion won last year. Last week, LG valued the offer at the top of the fork to raise 10.8 billion, making it the largest IPO in South Korea and the third largest in Asia. LG Energy Solution continues the trend of strong IPO demand from South Korean retail investors – known as “ants” – thanks also to government stimuli to support the economy after the crisis triggered by Covid-19 flooded the markets of liquidity.
LG Energy Solution, which controls more than 20% of the global market for electric vehicle batteries (surpassed only by the Chinese CATL, which exceeds 31%) and supplies Tesla, General Motors, Stellantis and Volkswagen among others, has set aside about 25% of the total shares offered to retail offerers, according to Reuters calculations. Retail demand follows offers for around 12.8 trillion won, another record, out of a total of 1,988 domestic and foreign institutional investors, as filed for the stock market debut.
The company is expected to go public on January 27.
The IPO price values LG Energy Solution at around 70.2 trillion won ($ 60 billion) and will make it the third largest company in South Korea after Samsung Electronics and SK Hynix Inc. Some South Korean brokers have seen a dramatic increase in the number of newly created accounts by retail investors as a result of demand. KB Securities, a leading bookrunner of the deal along with Morgan Stanley, said it saw a nearly 200% increase in the number of newly created accounts between January 1 and January 10, compared to the same period a month ago. .