Jihoon Lee, Heekyong Yang

SEOUL (Reuters). -LG Energy Solution Ltd (LGES), made its first trading day on Thursday, after South Korea’s largest-ever IPO attracted $13 trillion in bids. This makes it the second-most-valuable company in South Korea.

LGES shares started at 597,000 won against a 300,000 won initial public offer (IPO) price. The shares declined as much as 25% early in trading.

LGES, South Korea’s second most valuable company (after Samsung Electronics) Co Ltd has a market capitalization of over 105.3 trillion won ($87.62billion). Even at its lowest intra-day trading levels.

LG Chem Ltd is the parent company of this firm. It controls over 20% of global electric vehicle (EV), market. It supplies, among other things, Tesla (NASDAQ:) Inc., General Motors Co. (NYSE:) & Volkswagen AG (OTC?).

This trading debut sets the stage for future IPOs of South Korea. South Korean retail investors, also called “ants”, will flock to South Korea’s stock market as liquidity was boosted by the government’s stimulus program during the COVID-19 epidemic.

Park Jung-hoon (fund manager, HDC Asset Management, Seoul) stated that LGES’ first-day trading performance is hard to predict.

More than 4.4 million retail investors bid a record 114 trillion won to subscribe to shares https://www.reuters.com/markets/europe/skoreas-lg-energys-108-bln-ipo-draws-record-demand-retail-investors-2022-01-19 in the IPO, Asia’s largest equity fund raising since China’s Alibaba (NYSE: Group Holding Ltd) Group Holding Ltd has raised $12.9 Billion in the Hong Kong Secondary Listing in 2019.

Nearly 2000 institutional investors from both abroad and in the United States submitted bids for approximately $12.8 trillion.

Korea Exchange reports that more than 20 South Korea-based companies became public last year. The total amount raised was 17.3 trillion won. That’s nearly two times the 8.8 trillion won record set in 2010.

LGES is worth less than the $28 billion that Contemporary Amperex Technology Co Ltd, a larger Chinese rival (CATL) market. Kwon Youngsoo, LG’s Chief Executive has highlighted the company’s potential growth by pointing to its backlog of 260 trillion won batteries.

LGES may still face competition, warn analysts. As Chinese rivals expand in the global market, more automakers are looking to create their own EV-battery technologies.

($1 = 1,201.7400 won)