Robotics boom
The W421.2bn (US$323m) IPO of Doosan Robotics demonstrated how South Korea’s largest IPO of the year could still be done at the right timing and valuation when many other listing candidates opted to pull the plug.
The Korean IPO market had a dismal year in 2023 with a few high-profile issuers deciding early on not to take their deals forward, while many others either cut their fundraising targets or withdrew their listing plans under the volatile market conditions.
Doosan Robotics, the country’s largest maker of robots, managed to tap keen investor interest in the sector, which is expected to see increased demand as labour costs rise.
Founded in 2015, Doosan Robotics manufactures robots used for tasks ranging from precision assembly to making coffee. It is also partnering with Microsoft and sister company Doosan Digital Innovation to build GPT-enabled collaborative robots – or “cobots” – that follow voice commands.
Before the deal launched in late August, smaller rival Rainbow Robotics had seen its shares rise more than four-fold since the beginning of 2023.
Doosan Robotics rode on the momentum to bring the first main board listing of a robot maker, offering investors a chance to buy into a bigger player backed by conglomerate Doosan Corp.
The offer of 16.2m primary shares, or 25% of the enlarged share capital, was marketed in a price range of W21,000–W26,000.
The top end of the range represented a price-to-sales ratio of 35.7x based on a 2023 sales estimate of W47.3bn, which was lower than the average of 43.21x of other listed comparables at the time, as well as Rainbow Robotics’ estimated 2023 P/S of 163.09x.
Though the company was loss-making at the time of the IPO, the deal drew enormous demand. More than 1,900 institutional investors, including 256 foreign ones, collectively bid for 2.24bn shares, or 272 times the shares on offer in the institutional tranche. More than 90% of the institutional investors indicated a willingness to buy shares at the top or above the price range.
Retail investors offered to buy W33trn of the stock, a record for the year.
Shares in Doosan Robotics surged 98% to W51,400 on its trading debut on October 5, even though the deal was priced at the top end of the range at W26,000.
The stock continued to rise and finished the year at W116,100, almost 350% above the issue price.
About 60% of the offering was sold to institutional investors, 30% to retail investors and the rest to company employees.
Mirae Asset Securities and Korea Investment & Securities were the lead bookrunners. Credit Suisse, NH Investment & Securities and KB Securities were the joint bookrunners while UBS, Kiwoom Securities, Shinyoung Securities and Hana Securities were co-managers.
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