SK Group affiliate attracts the biggest IPO demand in history
Korean battery material maker SK IE Technology (SKIET) broke the country’s initial public offering (IPO) record in terms of demand by drawing tens of trillions of the Korean won.
SKIET received 80.9 trillion won ($73 billion) of deposits from individual investors over the two-day subscription period through April 29, according to its IPO advisors headed by Mirae Asset Securities.
The previous record was held by its sister firm of SK Bioscience, the vaccine development company that attracted 63.6 trillion won ($57 billion) from retail investors this March.
SKIET will debut on the Korean exchange midway through this May. Many expect that from Day 1, the lithium-ion battery separator maker’s value will rocket from its initial price of 105,000 won ($95).
Separators are one of the most significant parts of rechargeable batteries as they affect battery performance like energy, cycle life, and safety.
As an affiliate of SK Innovation, South Korea’s No. 2 battery manufacturer following LG Energy Solution, SKIET supplies battery separators to electric vehicle producers.
SKIET is already profitable as it recorded up 469.3 billion won ($420 million) in sales last year for an annual operating profit of 125.2 billion won ($113 million).
Popularity of electric vehicles
“SKIET attracts attention because of the rising popularity of electric cars. They need batteries, and batteries should be equipped with separators. And SKIET is a powerhouse in separators,” Prof. Kim Pil-soo at Daelim University said.
“Startups related to batteries and electric vehicles are expected to keep advancing into the stock market down the road.”
Meritz Securities researcher Ju Min-woo expected that SKIET’s share price will remain strong.
“The separator is one of the four main components of rechargeable batteries. And it is very difficult for newcomers to make separators,” he said.
The analyst expected that SKIET’s share price would almost double to around 200,000 won ($180).
Through the record-breaking floating, SKIET raised more than 2 trillion won. The firm said that it will expand its production facilities to meet the rising demand for wet separators.
In March, SKIET disclosed its plan of investing about 1 trillion won in building new separator plants in Poland. It also runs factories in Korea and China.