By Heekyong Yan and Seunggyu Sim

SEOUL (Reuters – South Korean lithium battery producer LG Energy Solution will probably price its IPO at around $11 Billion, according to two sources. The IPO is being priced at the highest point of its indicative range, as institutional investors are betting on the booming demand electric cars.

This pricing would result in LGES (a unit wholly owned by LG Chem Ltd and supplying to companies including Tesla (NASDAQ;), General Motors(NYSE:) or Hyundai Motor), becoming the largest South Korean listing.

LGES announced last week that 34 million new shares would be offered in an indicative range between 257,000 to 300,000. Won per share. That will raise approximately 12.8 trillion won ($10.9billion at the highest end). The IPO was scheduled for Jan. 14.

An investment banker who is intimately familiar with the matter said that LGES’s IPO was drawing more institutional investors this year than any other South Korean IPOs.

The banker said that only 14.5% of the shares are being made available to retail and institutional investors. Prospective buyers will need to be aggressive in order to secure an allocation.

A representative of a brokerage company involved in the transaction also stated that the initial feedback from institutional investors, primarily domestic, indicated that the IPO could easily be received at the top.

They were not allowed to talk to the media so they declined to give their names.

LGES responded to investor questions by stating that they were continuing with IPO plans. However, it did not provide any comment about prospective pricing.

LGES’s successful listing on South Korea’s Main Stock Exchange on January 27th would mark the beginning of what should be another great year for South Korea’s IPO Market.

KOSPI saw more than 20 companies going public in this year’s year. The total raised was 17. trillion won. That is nearly double the amount of 8.8 trillion won received in 2010, which was the largest year ever recorded, according the Korea Exchange.

LGES, at its highest price point would command a market capitalization of 70.2 trillion won ($59.39 million). This would place it as the third-most valuable South Korean company, after Samsung Electronics Co Ltd. (OTC) Co Ltd. or SK Hynix Inc with respective valuations of 460 trillion won (389.15 billion) and 89.3 billion won (75.3 million), respectively.

After the sale, Parent LG Chem will have 81.8% of the company’s equity.

ELECTRIC VEHICLE DEMAND

Analysts believe that investors are attracted to LGES because of its rare status as an elite battery manufacturer with well-established customers and the boom in demand for lithium-ion cells for electric cars (EVs).

The global market for EVs, which are expected to rise more than 12-fold from 2.5 million in 2020 to 31.1 millions by 2030, accounts for close to a third, according to Deloitte.

Cho Hyun Ryul, an analyst at brokerage Samsung Securities (KS:) Securities said that it’s not as if you’re betting upon an emerging battery manufacturer without limited market presence and customers.

However, some analysts warn that LGES’ stock performance and profitability could be at risk from any future EV industry hiccups such as Hyundai Motor’s $900million recall involving the Kona EV and GM’s $2 billion Bolt EV recall.

($1 = 1,183.0700 won)