South Korea's IPO market recorded sharp declines in the first half, with 17 new listings and ₩1.1 trillion in fundraising, according to Shinhan Securities on the 23rd. The 17 listings represented a 55.3% year-on-year decrease, while fundraising fell 48.7%, marking the weakest first-half performance since 2020 by number of listings. The decline was driven by a freeze on large-cap listings due to dual-listing regulatory debates and an adaptation period following new IPO rule implementations in the second half of last year, including expanded institutional lock-up requirements and stricter demand forecasting eligibility. Average returns for the 17 newly listed stocks stood at -14.1% relative to offering prices as of the end of June, with 13 of the 17 trading below their offering prices. Recovery in the second half depends on how successfully companies meeting new dual-listing guidelines integrate into the market, Shinhan Securities analyst Oh Gwang-young stated, projecting 64–68 full-year listings and ₩3.4–3.9 trillion in total fundraising contingent on guideline clarity and large-cap re-entry.
South Korea Records 17 IPOs and ₩1.1 Trillion Fundraising in First Half
The KOSPI market saw only one listing in the first half: K bank, which raised ₩498 billion, a 66% decline from the same period last year when four large-cap companies including LG CNS and Seoul Guarantee Insurance went public. The KOSDAQ market recorded 16 listings, down 53% year-on-year, but fundraising totaled ₩634.8 billion, a smaller 17% decline due to relatively large offerings from companies including Chaevi, StradVision, and Deokyang Energen.
The dual-listing controversy significantly impacted large-cap listings. LS Group affiliate Essex Solutions and Netmarble subsidiary Netmarble Neo halted their listing processes, reducing the pipeline of large-scale offerings. Oh Gwang-young attributed the first-half weakness to "the market undergoing an adaptation period as IPO system improvements implemented in earnest from the second half of last year took effect," adding that "dual-listing issues affecting large-cap stocks and weak post-listing price performance also contributed to the decline in listings."
First-Day Returns Averaged 178.7% but June-End Returns Fell to -14.1%
New listings demonstrated strong initial performance. The 17 companies posted an average first-day return of 178.7% relative to offering prices, with 12 companies opening at more than double their offering prices. Axbio, IM Biologics, Pauled, and Makinarocks ranked among the top performers by first-day return. StradVision was the only company to open below its offering price, starting below ₩12,000 and closing at ₩7,200 on its first day, a 40% decline from the offering price.
Post-listing momentum faded quickly. As of the end of June, the 17 stocks averaged -14.1% returns relative to offering prices. The 13 stocks trading below offering prices averaged -37% returns, while the four stocks above offering prices averaged 61% returns. Oh explained, "As domestic market liquidity concentrated in select semiconductor value chain stocks, investors became more stringent in evaluating KOSDAQ newcomers with relatively weak profit structures," noting that "a pattern emerged where first-day opening returns were highest and performance declined over time."
Shinhan Securities Projects 64–68 Full-Year Listings Contingent on Dual-Listing Guidelines
Shinhan Securities projects 64–68 IPOs and ₩3.4–3.9 trillion in fundraising for the full year, lowering prior forecasts due to first-half weakness but citing a pipeline of companies awaiting review approvals as a basis for gradual second-half recovery. The firm identified dual-listing guidelines as the key variable determining whether large-cap IPOs resume. The guidelines restrict dual listings in principle and permit exceptions only under strict conditions.
Despite tighter dual-listing regulations making listings more difficult for large conglomerate affiliates, Duksan Hi-Metal subsidiary Duksan Nepes and Dasan Networks subsidiary DTS are reportedly preparing listing procedures under the new standards. Oh stated, "If these companies successfully enter the market, some large-cap stocks considering listings are likely to re-initiate listing procedures," adding that "depending on circumstances, fundraising totals could far exceed projections."
The analyst cautioned that market adaptation to the new system will require time, noting risks of recurring issues such as earnings inflation as listing activity increases. The government is expected to strengthen oversight of IPO processes. Oh emphasized, "Excessive attention to public offerings can lead to market overheating as demand concentrates on limited supply," warning that "we must not forget the experience of markets freezing abruptly after overvalued offerings appeared." He added, "Market participants should keep in mind that government monitoring of IPO processes is intensifying" and "pay close attention to government-led IPO market system improvements and follow-up measures."
FAQ
How many IPOs occurred in South Korea's first half and how much was raised?
South Korea recorded 17 IPOs in the first half, raising ₩1.1 trillion in total. This represented a 55.3% decline in the number of listings and a 48.7% decline in fundraising compared to the same period last year, according to Shinhan Securities data released on the 23rd.
Why did South Korea's IPO market decline in the first half?
The decline was attributed to a freeze on large-cap listings caused by dual-listing regulatory debates, an adaptation period following new IPO rule implementations in the second half of last year (including expanded institutional lock-up requirements and stricter demand forecasting eligibility), and weak post-listing stock performance that discouraged new issuers, according to Shinhan Securities analyst Oh Gwang-young.
What is Shinhan Securities' projection for South Korea's full-year IPO activity?
Shinhan Securities projects 64–68 IPOs and ₩3.4–3.9 trillion in total fundraising for the full year. The firm cited a pipeline of companies awaiting review approvals as a basis for gradual second-half recovery, contingent on successful market integration of companies meeting new dual-listing guidelines.
