August IPO likely for Kakao Pay despite MyData hiccups

The much-anticipated listing of Kakao Pay, the financial technology arm of mobile giant Kakao, could come as early as August, according to industry sources on Monday, despite recent hiccups in securing a license for personal data integration services, called MyData, from financial authorities.

Kakao Pay was not included when the Financial Services Commission announced a list of 28 companies granted approval for MyData business. Kakao Pay’s rival Naver Financial and Viva Republica were among those included.

The FSC cited issues concerning the company’s second-largest shareholder Ant Group. China’s leading fintech company and the operator of Alipay, owns 43.9 percent of Kakao Pay, while Kakao holds the other 56.1 percent. The financial watchdog is required to check whether or not a major foreign shareholder has been the subject of criminal punishment and sanctions from the supervisory authorities of the origin country, but has not received confirmation from Chinese authorities.

However, the issue of the second-largest shareholder would have little impact on the company’s planned initial public offering, the sources said. The company is projected to apply for a preliminary screening for its IPO in April after the ongoing due diligence process by Samjong KPMG is completed. Once it is given the green light from the Korea Exchange, the country’s stock market operator, the company could go public as early as August.

It is slightly behind schedule, but the IPO is expected to come earlier than other blockbuster listings of Kakao subsidiaries, including South Korea’s second internet-only lender Kakao Bank, and content platform Kakao Page, both of which are planning to list this year.

Kakao Pay, whose post-IPO market capitalization is expected to reach 10 trillion won ($8.84 billion), is likely to be listed on the country’s primary Kospi board, rather than the tech-focused Kosdaq, due to the size of the public offering, sources said.

Representatives from Kakao Pay declined to confirm the exact IPO schedule Monday.

(gypark@heraldcorp.com)