October’s crowded IPO schedule raises concerns

By 최희석

Published : Sept. 28, 2016 - 16:11

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[THE INVESTOR] October will see the largest number of initial public offerings this year, but there are concerns that the volume could pose an obstacle for the companies.

Next month, three companies are planning to be listed on the KOSPI and 12 are preparing to go public on the KOSDAQ.

Of these, Doosan Bobcat, a unit of power and construction equipment conglomerate Doosan, will be the largest with the company hoping to raise about 2 trillion won (US$1.82 billion. The remainder are eyeing a combined total of 500 billion won.

The Yeouido financial district in western Seoul

Due to the large number of IPOs, however, industry watchers say that smaller companies could fail to gain investors’ attention being shadowed by Doosan Bobcat and other larger offerings.

Doosan Bobtcat, however, is not free of concerns with some in the industry saying the IPO price has been set too high.

The lower boundary for Doosan Bobcat has been set at 41,000 won, based on the calculation that the minimum price-earnings ratio is 19. While Doosan Bobcat’s PER has been derived using US and Japanese benchmarks, PER ratios of 12 or 13 are more common among South Korean machinery makers.

By Choi He-suk (cheesuk@heraldcorp.com)

October’s crowded IPO schedule raises concerns

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