Kakao Pay starts taking bids from institutional investors ahead of IPO next month
Updated: 2021-10-20 17:06:26 KST
Kakao Pay, the fintech unit of Kakao Corporation has started taking bids from institutional investors for its initial public offering next month.
The proposed price band is between 51 and 76 U.S. dollars.
The IPO offering price will be set after the two-day book-building session this week.
Retail investors will be able to pre-order shares on October 25th and 26th before Kakao Pay makes its trading debut on the country's main bourse in early November.
The company hopes to raise up to 1.3 billion dollars by offering 17 million new shares.
Upon listing, its market cap could reach almost 10 billion U.S. dollars at the top end of the price band of 76 dollars.
If so, Kakao Pay will join the KOSPI's top 30, which includes Hybe, formerly known as Big Hit Entertainment and home to K-pop boy band BTS, as well as South Korean game developer Netmarble.
But there's mixed projections on whether Kakao Pay's IPO will be a success amid toughened regulations on fintech platforms.
From late September, Kakao Pay can no longer compare nor recommend financial products, such as funds and insurance plans to its users.
This comes as the revised Financial Consumer Protection Act requires fintech platforms to halt such services unless they've registered with regulators and received a license or approval.
The company's second-largest shareholder, Alipay of China, was also hit by the Chinese government's big tech crackdown last year.
Industry watchers say that the current conditions could affect the upcoming IPO.
Kakao Pay, however, stressed that the suspended services accounted for no more than two percent of its revenue since 2018, adding that the suspension will have a limited impact on the company's growth.
Min Suk-hyen, Arirang News.