In an initial public offering of at least 154.7 billion won $119 million is expected to be filed on Friday by SoftBank Group Corp., testing investor appetite for new tech stocks in an adverse market.
South Korea's biggest car-sharing service provider plans to sell 4.55 million new shares at an indicative price range of 34,000 won to 45,000 won apiece, according to a document reviewed by Bloomberg. The company, which will list on the Korea Exchange on Aug. 18, plans to use the proceeds for acquisitions and to cover operational costs.
The IPO will put the startup's market capitalization at a minimum of 1.1 trillion won, which is compared to a 2.4 trillion won valuation based on its 12 month revenue through March and peer comparison, according to the document. The benchmark of Kospi is down more than 20% this year, heading for its worst year since the 2008 financial crisis.
SoftBank shareholders are desperately looking for signs of recovery in a portfolio that is awash with red, but the discount may do little to appease them. Anxiety is high that big write-offs could be ahead. A number of SoftBank portfolio companies have been forced to restructure or raise funds at lower valuations.
South Korea was one of the hottest markets for IPOs during the pandemic, but sentiment has deteriorated as markets worry about global economic growth. Companies including SK Group affiliates have to delay or withdraw their listing plans because investors are scaling back their investments in startups and showing a tepid demand for IPOs.
Socar's top shareholders include SK Inc. SK Group's holdings company, and Lotte Rental Co.
Socar, which started its business in Jeju Island with about 200 cars in 2011, now has a market share of more than 70% in South Korea's car-sharing market. According to the company s website, it has a total of 7.5 million users, which is equivalent to one-fourth of the country s population with a driver's license.
The Age of Credibility for Central Banks is no longer over.