South Korean IPO Pipeline Disappears as Market Conditions Slip

Poor market conditions in South Korea have led companies to suspend initial public offerings (IPOs), according to Pulse, a Korean news service.

Last month, Daemyung Holdings Co. Ltd., the Seoul-based renewable energy provider, withdrew plans to go public on Kosdaq, the country’s tech trading platform. Executives cited the inability to value their companies as the reason for their decision.

In January, Hyundai Engineering put its IPO process on hold. The company was founded in 1974 and has grown into what it calls a global engineering company that represents Korea worldwide.

In addition, Market Kurly, the food delivery and logistics platform that enables users to order food online and receive it the following morning, has not filed its IPO despite plans to go public in the first quarter.
Four other firms have also postponed IPOs, the news service reported.

The ones that have debuted have not performed well so far. Kosdaq reported eight out of 16 stocks that went public since January are performing below IPO prices. The 16 stocks had an average return of 20% , much lower than 32% of comparative return by last year’s entrants.

Given the volatility from the war in Ukraine, experts said the IPO drought will continue through the first half of 2022.

South Korean companies are not the only ones hitting the pause button in light of Russia’s attack on Ukraine.

Read more: Russian Invasion Prompts Companies to Rethink IPOs

In Europe, businesses withdrew $634.31 million in equity capital markets deals in February, up from $140.4 million in February 2021, according to Dealogic.

American firms pulled $1.17 billion in equity capital markets transactions during the month of February, compared to $350 million in deals scrapped by the same time the year prior, according to Dealogic data.