LG Energy Solution Raises $10.8 Billion in South Korea’s Largest IPO

South Korean battery maker LG Energy Solution (LGES) has raised $10.8 billion (about Rs. 80,045 crore) in its initial public offering (IPO), sparking record demand for a deal in South Korea, the company said Friday.

LGES shares were priced at KRW 300,000 (approximately Rs. 18,710) each, at the top of a range announced in a regulatory filing last month, raising KRW 12.8 trillion (approximately Rs. 79,840 crore).

The IPO, set to take place on January 27, will be the largest in the country after Samsung Life’s IPO of KRW 4.8 trillion (approximately Rs. 29,945 crore) in 2010.

The pricing values ​​LGES at KRW 70.2 trillion (approximately Rs. 4,37,930 crore), making it South Korea’s third most valuable company after Samsung Electronics and SK Hynix.

GES, the battery subsidiary of LG Chem, supplies Tesla, General Motor and Volkswagen AG, among others.

A total of 1,988 domestic and foreign institutional investors placed bids, the LGES filing revealed, with total bids valued at a record $12.8 trillion (approximately Rs. 9,48,77,180 crore).

LGES said the institutional book for the IPO was covered 2,023 times – the largest ever for an IPO in South Korea.

LGES expects to offer 34 million new shares at the IPO and parent company LG Chem plans to offer 8.5 million existing shares.

The parent company will own 81.8 percent of LGES after the listing.

The IPO comes as global sales of battery-powered electric vehicles (EV), estimated at 2.5 million units in 2020, are expected to grow more than 12-fold to 31.1 million by 2030, accounting for nearly a third of new vehicle sales, according to consultancy Deloitte.

Analysts said they are closely monitoring LGES’s IPO and how the stock trades later this month to gauge the health of the IPO market in 2022.

South Korea saw its hottest IPO market on record last year. More than 20 companies went public on the main KOSPI market, according to the Korea Exchange.

© Thomson Reuters 2022

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