LG Energy Solution sets record 114 tln won in IPO retail bids

January 19, 2022

South Korean battery maker LG Energy Solution Ltd. (LGES) drew record high demand from retail investors in the public subscription for its red-hot initial public offering (IPO) next week, its underwriters said Wednesday.

The company attracted 114.1 trillion won (US$95.8 billion) in deposits from some 4.4 million retail investors through seven brokerage firms that collected the bids during the two-day subscription, according to the IPO managers, including KB Securities Co.

The deposits far surpass the 81 trillion won submitted for SK IE Technology Co., a battery materials manufacturer that went public last year, the largest to date.

On Tuesday alone, retail investors submitted 32.6 trillion won in deposits.

The competition ratio for the retail bids came to 69.34 to 1, LGES said.

An ad notice on LG Energy Solution Ltd's retail subscription stands at a Shinhan Investment branch in Yeouido, in western Seoul, in this photo taken Jan. 18, 2022. (Yonhap)

An ad notice on LG Energy Solution Ltd’s retail subscription stands at a Shinhan Investment branch in Yeouido, in western Seoul, in this photo taken Jan. 18, 2022. (Yonhap)

The strong retail bids for LGES were widely expected, following its phenomenal record 15.2 quadrillion-won worth of institutional demand collected during last week’s book building.

That priced the IPO at the top end of 300,000 won per share, tipping the company to raise 12.75 trillion won in what will be the country’s biggest-ever IPO set for next Thursday.

The IPO will value LGES at 70.2 trillion won, making it the third-biggest listed company on the main stock exchange, KOSPI, only after two South Korean tech bellwethers — Samsung Electronics Co. and SK hynix Inc.

Analysts forecast its market cap could go well above 100 trillion won.

LGES, the world’s second-largest electric vehicle battery manufacturer after China’s CATL, said in regulatory documents it plans to spend 8.84 trillion won to boost its domestic and overseas production.

LGES said its joint venture with General Motors Co. operates a plant in Michigan and is building two others in Ohio and Tennessee. Its European plant is based in the Polish city of Wroclaw.

The battery maker also has partnered up with global carmaker Stellantis N.V. to build a battery plant in North America.

LGES, whose key clients include Volkswagen, Tesla and Hyundai Motor, has a cumulative order backlog worth about 260 trillion won, the company said.