27 preliminary reviews cleared in two months as up to 49 new listings eyed for second half
Market Times tally shows 31 issues underperforming IPO prices ahead of November regulatory overhaul
Even as a year-end rush of initial public offerings (IPOs) floods the market, companies that recently debuted on the KOSDAQ exchange are failing to hold their offering prices. Over the past two months, 27 companies have passed preliminary listing reviews, with another 36 currently waiting in the pipeline. However, as of the Oct. 21 close, 31 out of 36 companies (86.1%) that newly listed on the KOSDAQ this year were trading below their IPO prices. While the listing process is accelerating, investor sentiment toward market debutants remains decidedly cold.
Review period cut by 13 days; listings heavily concentrated toward year-end
According to the Korea Exchange (KRX) on Oct. 22, 14 companies won preliminary listing approval in September, followed by another 13 this month, bringing the total to 27 approvals in under two months. This contrasts sharply with the April–August period, when monthly approvals lingered between one and eight.
The average review period for companies approved this month dropped to 49.5 business days—13.3 days shorter than the first-half average of 62.8 business days. Furthermore, the proportion of cases approved within the statutory 45-business-day review limit climbed from 8% in the first half to 37% since September.
Actual new listings are also heavily concentrated in the second half. During the first half of the year, newly listed companies on both the main KOSPI and KOSDAQ markets totaled 18, less than half of the 39 recorded during the same period last year. Conversely, second-half debuts from July through Oct. 20 already reached 24, surpassing the entire first-half tally.
Currently, 36 companies have secured preliminary approval and are awaiting listing, with 25 of them having already set their debut dates or public subscription schedules. In November alone, 17 companies are scheduled to conduct public subscriptions for retail investors. If all slated pipelines list within the year, second-half debuts will reach 49—2.7 times the figure for the first half. Total annual listings are projected at around 67, falling short of last year's 83.
Unlike the recovery in listing volume, capital-raising figures have yet to return to last year's levels. Data compiled by IR CUDOS shows that total IPO proceeds in the first three quarters reached 1.63 trillion won ($1.18 billion), down 52.1% from 3.40 trillion won a year earlier. Given that the absence of large-scale IPOs played a major role, the recent uptick in listing counts alone does not signal a broad recovery for the primary market.
86% of recent debuts trade below IPO prices; losses triple KOSDAQ drop
An analysis by Market Times of the Korea Exchange’s KIND disclosure portal data regarding "stock price fluctuations relative to IPO prices" showed that 31 out of 36 KOSDAQ debutants this year (86.1%) sat below their offering prices as of the Oct. 21 close. SPACs and companies that newly listed on the same day were excluded from the tally.
The slump among fresh market entrants was particularly pronounced during the recent stock market correction. Between Oct. 7 and Oct. 16, seven companies that went public after September suffered an average stock price decline of 37.43%, more than triple the 11.54% drop in the KOSDAQ index over the same period.
While institutional demand forecasts frequently resulted in offering prices being set at the top of indicative ranges, post-listing market appraisals diverged significantly. Instances where initial institutional demand failed to support subsequent share prices have occurred repeatedly.
Wise Planet Company surged 285.83% above its IPO price on its debut, but closed at 8,700 won on Oct. 21, down 27.50% from its 12,000 won offering price. Similarly, Duksan Nepcore saw a 23.15% gain on its first trading day before finishing at 9,030 won on Oct. 21—a 38.15% plunge from its 14,600 won IPO price. High initial returns on listing day failed to guarantee subsequent price momentum.
Amid this ongoing weakness in newly listed stocks, the framework for calculating offering prices and allocating shares to institutional investors is set to change starting next month.
Beginning Nov. 13, the Financial Services Commission (FSC) will implement a preliminary demand-forecasting system allowing underwriters to gauge institutional bidding interest and order volumes before submitting securities registration statements. The move aims to enhance the rationality of pricing by reflecting actual institutional demand from the initial stage of determining indicative price bands.
A "cornerstone investor" system will also be introduced, pre-allocating a portion of IPO shares to institutional investors who commit to holding their stock for a specified period. Under the FSC's revised subordinate regulations, 50% of pre-allocated shares will be subject to a six-month lock-up, 30% to eight months, and 20% to ten months. The measure is designed to mitigate the burden of concentrated institutional selling immediately after listing or at specific intervals.
Although a continuous wave of new listings is anticipated in the year-end IPO market, the reality that most existing debutants have failed to recover their offering prices could weigh heavily on upcoming public offerings. With regulatory reforms approaching in November, the appropriateness of pricing methodologies and post-listing price stability are emerging as critical benchmarks for rebuilding trust in the primary market.
