The much-anticipated IPO of Doosan Robotics on the KOSPI this year has solidified its offering price at the top of its anticipated range, thanks to massive interest from the world’s largest sovereign wealth funds and asset management companies.
According to the domestic economic media Seoul Economic Daily, Doosan Robotics announced on Sept. 19 that they have set the IPO price at 26,000 won per share after conducting a public subscription demand forecast with domestic and foreign institutional investors. As a result, the total offering size has been determined to be 421.2 billion won (16.2 million shares), setting Doosan Robotics’ market capitalization based on the IPO price at approximately 1.6853 trillion won. A staggering 1,920 institutions participated in the demand forecast, registering a competition ratio of 272:1.
Notably, the world’s largest sovereign wealth fund managed by the Central Bank of Norway and the Singapore Investment Corporation (GIC), as well as top-tier global investment firms like BlackRock and Goldman Sachs Asset Management, all vied for even just one more share of Doosan Robotics, pouring significant capital into the demand forecast.
The Norwegian Sovereign Wealth Fund, managed by the Central Bank of Norway, is the world’s largest with assets amounting to 1.4 trillion dollars as of last year. Similarly, the state-owned Singaporean investment firm, GIC, manages assets equivalent to 900 trillion won.
BlackRock, the world’s largest asset management company, also placed its bet on Doosan Robotics’ IPO. As of last year, BlackRock’s managed assets amounted to a whopping 9.5 trillion dollars. Additionally, over 20 major foreign asset management firms, including Goldman Sachs Asset Management, participated, aiming to acquire the shares allocated internationally.
An industry insider revealed, “Foreign institutional investors placed orders amounting to approximately 292 million shares,” and added, “they poured in orders exceeding 7 trillion won for investing in Doosan Robotics.” The amount of IPO shares projected to be allocated overseas is estimated to be between 100 billion to 120 billion won.
During Doosan Robotics’ demand forecast, institutional investors actively extended their mandatory holding period to be allocated even just one more share. Doosan Robotics announced that 60.3% of all participating institutions committed to a mandatory holding period, the highest figure in this year’s IPO market. A mandatory holding commitment refers to the pledge by domestic and foreign institutions not to sell IPO shares for a specified period (from 15 days to 6 months) after being allocated them.
Based on the order volume, the shares committed to the mandatory holding period accounted for 51.6% of the total. Generally, issuers and listing sponsors allocate more shares to institutional investors who commit to longer holding periods to prevent a stock price decline after market debut. In fact, 23.5% of all participating institutions committed to a holding period of 6 months from the listing date.
94.79% of the institutions placed orders above the top of the anticipated offering price range (21,000 to 26,000 won). Excluding the unsubscribed shares, institutional investors are expected to be allocated up to 75% (between 231.6 billion to 315.9 billion won) of the total offering amount of 421.2 billion won. Given that the competition ratio for the demand forecast was 272:1, the total order volume amounts to approximately 86 trillion won.