K Bank, Esteem Show Starkly Different IPO Debuts Despite One-Day Gap

K Bank and Esteem, which went public just one day apart, posted sharply contrasting results. K Bank, considered one of this year's major IPO deals after succeeding on its third attempt, showed lackluster performance, while Esteem made a splendid debut by quadrupling its IPO price on the first trading day.

According to the Korea Exchange on Friday, Esteem, which listed on the KOSDAQ market the previous day, surged to the daily limit immediately after market open and maintained that trend until close despite minor fluctuations.

Esteem, known for managing famous models including Jang Yoon-ju, Han Hye-jin, and Lee Hyun-yi, had signaled strong demand by recording a subscription rate of 1,960.87-to-1 in its retail subscription.

Subscription deposits totaled approximately 3.75 trillion won with 504,443 applications. Institutional interest was also high. A total of 2,263 institutions participated in the book-building process held February 9-13, recording a competition ratio of 1,335-to-1.

Notably, 99.9% of participating institutions (including those without price bids) submitted prices at or above the top of the offering range, finalizing the IPO price at 8,500 won, the upper end of the price band.

Esteem turned profitable in 2024 with 2 billion won in operating profit, and posted revenue of 26.1 billion won and operating profit of 1.8 billion won on a cumulative basis through the third quarter of last year, demonstrating steady growth. This solid financial footing appears to have driven its first-day quadrupling.

In contrast, K Bank, which debuted on the KOSPI market on Wednesday, closed at 8,330 won on its first trading day, up just 30 won (0.36%) from its IPO price of 8,300 won. Despite being the first KOSDAQ listing of the year, it failed to sustain the IPO investment enthusiasm that swept through the second half of last year.

K Bank opened at 9,000 won, 8.43% above its IPO price, and climbed as high as 9,880 won before paring gains during the session and ultimately falling more than 1%, enduring a harsh market debut.

The following day brought no reversal. K Bank closed at 7,750 won on Thursday, down 6.86% from the previous session.

Korea Investment & Securities issued a "neutral" rating on K Bank, citing difficult conditions for expanding household loans. The firm did not set a target price.

"Due to total household debt regulations and targets for credit loan ratios to mid-to-low credit borrowers, it is not easy to expand household loans," said Baek Du-san, analyst at Korea Investment & Securities. "SME lending is a growth breakthrough, but amid intensifying competition among financial institutions for corporate loans, it is difficult to grow loans as quickly as new lending capacity allows."

However, he noted that K Bank has sufficient potential to expand into a specialized virtual asset service bank encompassing stablecoins for corporate clients, based on its partnership with Upbit.

"If the Digital Asset Basic Act and stablecoin industry promotion policies within it progress rapidly, multiple re-rating is possible despite the overhang risk surrounding K Bank," Baek added. "In that case, competitors' price-to-book ratios would serve as a useful reference point."