Polarization in H1 IPO Market: Large Caps Struggle While Small and Mid-Sized Offerings Sell Out

In the first half of this year, the initial public offering (IPO) market saw both the number of new listings and the total offering volume fall significantly below historical averages. Data indicates a clear polarization in market performance, with investor capital flocking primarily to small and mid-sized offerings.

According to the financial investment industry on July 17, Eugene Investment & Securities reported that 27 companies went public in the first half of this year, including those on the SPAC and KONEX markets. This figure is well below the first-half average of 47 companies recorded between 1999 and 2025, and significantly lower than the average of 52 companies over the past five years.

The total offering volume also saw a sharp decline, with the first-half total reaching approximately 1.2 trillion won. This is far below the first-half average of 2.1 trillion won since 1999 and the 5 trillion won average from the past five years.

This trend is attributed to the virtual absence of large-cap IPOs this year, with the exception of K-Bank, which raised 498 billion won. This stands in contrast to the first half of last year, which saw major companies such as LG CNS and SGI Seoul Guarantee enter the KOSPI market.

Conversely, investor enthusiasm for IPOs remained high. According to Samsung Securities, the average competition rate for general public subscriptions in the first half of this year was 1,782 to 1, surpassing the 869 to 1 average recorded between 2017 and 2025. Furthermore, 82.4% of offerings saw their final IPO prices set at or above the top end of the indicative range.

However, mid-to-large cap stocks struggled to attract interest. K-Bank, Chaevi, and StradVision, which all saw their IPO prices set at the bottom of their indicative ranges during demand forecasting, are all mid-to-large cap companies with market capitalizations exceeding 500 billion won. In contrast, most small and mid-sized KOSDAQ stocks with market caps between 100 billion and 300 billion won set their prices at the top of their ranges and recorded high subscription competition rates.

The Equity Capital Market (ECM) industry suggests that as the size of an offering increases, so does the burden on institutional investors to absorb the volume and commit to mandatory holding periods. Additionally, with higher risks of stock price volatility after listing, more rigorous corporate valuation has been applied to mid-to-large cap deals.

Securities firms analyze this phenomenon as a result of short-term liquidity concentrating on small and mid-sized stocks, which can be moved with relatively less capital, amid a reduced supply of IPOs. They anticipate that this atmosphere may see some improvement starting in the second half of the year.

(Photo: Provided by K-Bank, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.