Big Hit Entertainment Co., the South Korean agency behind K-pop superstar BTS, on Thursday kicked off its two-day book-building session, hoping to ride on the recent initial public offering (IPO) boom after successful debuts of SK Biopharmaceuticals Co. and Kakao Games Corp.

According to multiple sources from the brokerage industry on Thursday, Big Hit Entertainment invited institutional investors to its two-day book-building session that began on the same day. The company plans to sell total 7.13 million shares, of which 4.27 million shares or 60 percent have been set aside for institutional investors. Half of the remaining 40 percent – 1.43 million shares – will be sold to retail investors and the other half has been distributed to employee stockholders association.

Once book-building session is completed on Thursday, Big Hit Entertainment will confirm the IPO price. The company priced the IPO band between 105,000 won ($89.5) and 135,000 won per share for market value of up to 4.8 trillion won.

The brokerage industry expected the IPO price to be determined at the highest end of 135,000 won per share. Eyes are on whether Big Hit Entertainment will break the bidding record set by Kakao Games that drew 1,479 more bids.

Some analysts, however, remain cautious about whether Big Hit Entertainment would be yet another blockbuster IPO, citing the sudden cooldown in the country’s IPO market following the recent correction in global stocks and markets. The investor sentiment in the IPO market has turned a bit negative compared with two weeks ago when Kakao Games made its debut at double its IPO price.

But an unnamed official from the brokerage industry argued that the sudden chill in the IPO market was driven by investors who have parked record fluid money in securities accounts while waiting to grab Bit Hit IPO.

A majority of local brokerage houses present Big Hit target prices that are mostly higher than the IPO price.

Shinyoung Securities estimated Big Hit Entertainment to hold market value of 5.75 trillion won, which is about 180,000 won per share. The lowest target stock price of the company set by brokerages is 160,000 won and highest 296,000 won.

By Pulse

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