Gaonchips Co., a South Korean semiconductor chip design house, has become a rare IPO valuable as it survived overall shunning of IPOs that led to chain dropouts by big names.
The company received a total of 7.6 trillion won ($5.9 billion) subscription deposit from individual investors for its offering of 500,000 IPO shares on May 11-12, recording a competition rate of 2,183:1. Lately, the competition rate in the local IPO market has hovered just around 1,000:1.
The company is to float a total of 2 million shares with a per-piece price of 14,000 won to raise 28 billion won, with a quarter of its IPO offering reserved for retail investors and the rest to institutional investors.
Its book-building session, held on May 2-3, was equally hot, recording a competition rate of 1,847.12:1. More than 99 percent of institutional investors had submitted their bid prices of 13,000 won or above. Gaonchips had set the indicative price range of between 11,000 won and 13,000 won apiece. But thanks to the sizzling demand, the company priced its IPO shares at 14,000 won apiece.
Daishin Securities, the bookrunner, attributed strong investors’ demand for Gaonchips IPO shares to the company’s outstanding presence in chip designing sector. Gaonchips, established in 2012, is a chip design house that specializes in designing chips for autonomous driving and artificial intelligence sectors. Its clients include Samsung and ARM.
Gaonchips has made an exception in the dried-out IPO market.
The company is the only one to proceed with an IPO plan without disruption in May. Three firms - SK shieldus, One Store, and Tailim Paper - have withdrawn their IPO plans, while Bflysoft has pushed back its listing schedule to move to the secondary Kosdaq from the startup-focused Konex by a month.
Some analysts suspect that Gaonchips may have benefited from the absence of major IPOs, especially SK Group units - SK shieldus, a major security firm, and One Store, the second largest app market in Korea.
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