The fintech company Kakao Pay, affiliated with the country's largest smartphone chat application,… Kakao, will debut on the country's benchmark KOSPI next week,… on November third.
Ahead of the IPO, the two-day pre-order for retail investors took place this Monday and Tuesday.
Investors raced to get their hands on Kakao Pay shares,… pouring about 5 billion U.S. dollars into retail orders.
Submitted orders came to around 30 times the amount of stocks made available.
Each retail investor will be able to get an average of 2.3 shares.
Interest is high as Kakao Pay is the country's largest mobile payment service and has more than 20 million users.
"I came to the branch because of the Kakao Pay pre-IPO bidding. We talk using Kakao app and we use Kakao Pay whenever we transfer money online. I believe most people in South Korea use the service and it's becoming more common. So I thought owning Kakao Pay shares could lead to a profit. I'm thinking of bidding for 100 shares today."
But this time, unlike other companies, the share allocation method will be different.
"KakaoPay will be the first company in South Korea to distribute its stocks ahead of the IPO with an equal chance for all retail subscribers who deposit the minimum amount."
"This time, 100 percent of shares allotted for retail investors are distributed with an equal chance so, I believe that it is unlikely that I'll get more shares even if I put more money in. So I just deposited the money for 20 shares which is the minimum amount."
This measure is likely to enable as many retail investors to own Kakao Pay shares.
The company also took orders from institutional investors last week and it was oversubscribed by a factor of more than 17-hundred.
With the fierce competition, many are expecting the share price to jump shortly after trading begins.
But some experts say "ddasang," a local market slang term describing the share opening at more than twice the IPO price and hitting the daily upper limit of 30 percent above the opening price, is not likely for Kakao Pay.
"Currently, the financial market is going through a slow period. The price of Kakao Bank shares failed to double on the first day of trading. Kakao Pay is likely to go through similar phases in the early days of trading."
He added even with the IPO, it is important for the investors to pay attention to the fundamentals and the potential long term growth of the firm rather than selling it in the early days of trading.
Eum Ji-young, Arirang News.