While many brokers in Europe have been moaning about the lack of IPO activity, Asian markets seem to be where many of the juicy IPOs have been happening. If you are an IPO junkie, it may be worth opening discussions with a few brokers who can link you in to some of the grey markets in this area.
Kurly gets blessing to list online grocer in Korea
News out this week from Korea is that South Korea’s Kurly has received preliminary approval for an IPO. I know at least one fund manager with his eyes on this one. Kurly, which is an online grocer that was a direct beneficiary of food shopping during the pandemic in Korea, saw a x3 growth in revenue during lockdown. It reported a loss for 2021, but that was to be expected as Korean shoppers started to venture out again.
The company was valued at around 4 billion Korean won at the end of last year, following a 250 billion won private equity investment. A lot of Korean institutions are likely to take a slice of this pre-IPO. Korean IPOs have been choppy of late, and a couple of big ones – e.g. Hyundai Engineering – pulled theirs as markets got choppy in Q2. But Kurly looks like one to watch closely. Much will depend on the timescale.
United Imaging shares surge post-IPO in Shanghai
The possibilities for Asian IPO investment were clearly demonstrated on Monday when China’s United Imaging saw its debut, rising 75% on the day. This is the biggest IPO on China’s STAR market this year, valued at a punchy USD 1.6bn. Chinese investors piled into this one, as they see its core diagnostic imaging technology as something of a safe haven. Solid fundamentals and plenty of market liquidity have also supported the price rise for United Imaging stock.
Institutional players are also understood to be buying into the stock. It is attractive because it is widely regarded as a domestic replacement for overseas technology, as Chinese firms seek to become more reliant on stuff that is made at home. Even China is feeling the pain of disrupted supply chains.
Syrma SGS Technology heavily oversubscribed
And if you want to see a hot IPO market in action, check out the reported demand for Indian IPO Syrma SGS Technology. Shares are currently in the grey market in Mumbai and being heavily over-subscribed by both retail and institutional investors. Final allotment of shares is expected today, Tuesday. Syrma is a precision engineering firm with a healthy slate of big clients in both India and abroad. Among its clients are Robert Bosch Engineering and Eureka Forbes.
The IPO was oversubscribed 87x by institutional investors; in the retail segment, it was oversubscribed slightly over 5x. That’s still a very healthy demand. Market insiders are saying that the stock is being priced with a premium of around 58 rupees in the grey market, with an anticipated market price of 278 rupees. It looks likely to spike once shares hit the market at the end of this week.
