KakaoBank's stock price fall may affect K bank's IPO
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| K bank headquarters in Seoul / Yonhap |
By Lee Min-hyung
KakaoBank's stock price fall comes as a serious burden for K bank's planned initial public offering (IPO), as the latter will not be able to attract as much capital as it expected unless the market leader's valuation recovers quickly.
K bank, a first-generation internet-only bank along with the Kakao affiliate, recently reiterated its unwavering plan to go public in 2023. In a New Year's address, K bank CEO Suh Ho-sung pledged to push for the IPO this year, in a bid to expand its market influence even during this period of financial uncertainty.
Nonetheless, it remains unclear whether the KT affiliate will proceed with its planned IPO procedures as scheduled, as the firm's estimated post-IPO valuation has been on a sharp decline for the past few months. Earlier in the first half of 2022, K bank was valued at as high as around 8 trillion won ($6.4 billion), but the valuation tumbled to around 4 to 5 trillion won, in line with the chilly market sentiment and KakaoBank's steep stock decline.
KakaoBank's corporate value once soared to more than 40 trillion won soon after going public in August 2021. But the boon did not last long as its stock price suffered a big decline. As of Monday, the firm's market capitalization plunged to around 13 trillion won. This is a drop of over 67 percent in less than two years after it went public.
K bank has been stung by the weak stock performance of the market leader, as the former cannot be properly valued under the current bearish market cycle.
"KT's management expects the banking affiliate to attain a market capitalization of at least 7 trillion won, but the target is far beyond investors' estimation of 4 trillion won," Hana Securities analyst Kim Hong-sik said. From the perspective of KT's management, it does not have to push ahead with K bank's IPO at a lower-than-expected price level, the analyst pointed out.
According to data from Securities Plus Unlisted, a trading platform of unlisted stocks here, K bank's stock price hit a one-year high of 23,400 won in March last year, but the figure fell to 11,400 won as of Monday. The firm's estimated market capitalization came in at 4.28 trillion won, according to data from Securities Plus.
K bank did not submit an offering circular by the de-facto deadline of Jan. 6. This is a required procedure to attract foreign investors, so, rumors have surfaced that K bank will delay its planned IPO for another year.
