All initial public offerings in South Korea last year priced within their indicative price ranges, while institutional investors' lock-up commitments reached their highest level in five years, according to the Financial Supervisory Service.
The FSS said Sunday that only 7% of institutional investors submitted bids above the upper end of IPO price bands last year, down sharply from 83.8% in the previous year. As a result, all IPO pricing was set at or below the top of indicative ranges. While 97% of listings in the second half priced at the upper band limit amid a stock market rally, not a single IPO exceeded its price band.
Lock-up commitments accounted for 41% of shares allocated to institutional investors, up 22.9 percentage points from 18.1% the previous year. This surpasses levels seen during the 2021 IPO boom. By market, the Kospi recorded 54.9% and Kosdaq 39.6%, representing increases of 13.6 percentage points and 23.8 percentage points respectively. Three-month lock-ups comprised 41% of total commitments. In the Kosdaq market, six-month commitments reached 25%, exceeding the Kospi's 16%, driven by increased long-term investment in popular stocks.
A total of 76 companies went public last year, raising 4.5 trillion won ($3.1 billion). While the number of listings was similar to the previous year's 77, proceeds increased by approximately 600 billion won. Six large IPOs raising between 100 billion won and 1 trillion won were completed, the highest since 2022. Retail investor subscription competition averaged 1,106-to-1, rising for three consecutive years since 2022.
"The IPO market last year showed positive developments including pricing normalization, increased long-term investment, and recovering investor sentiment," an FSS official said. "This stems from reforms to the book-building system and underwriting practices aimed at improving the rationality of IPO pricing taking root in the market."