Tens of thousands of investors flocked Wednesday to place an early order for shares of Samsung SDS Co., an IT services unit of South Korean conglomerate Samsung Group, nine days before its debut on the main bourse.
Earlier in September, the main local bourse Korea Exchange
(KRX) gave its go-ahead for the IT solutions company's initial public offering (IPO), slated for Nov. 14. With an offering price set at 190,000 won (US$175.52), the IPO is anticipated to be the second-largest in the country this year at an estimated total of 1.16 trillion won.
A total of 18.82 million orders were placed by investors for some 1.22 million shares up for bidding at five local investment banks that had been selected as underwriters for the IPO, according to data. The figures translate to a 15.43 to 1 chance for an investor to actually obtain a share.
Orders can be made for about 20 percent of the shares to be sold on the KRX until Thursday.
At Korea Investment & Securities Co., which had put up the largest number of shares for pre-orders at 658,757 shares, a single customer paid as much as 15 billion won in deposit money to secure shares for the upcoming IPO.
"Of all the customers who actually came to the bank to place an order, not one put in a bid of less than 100 million won," said a Korea Investment & Securities official from one of the bank's Seoul branches.
"Mostly women in their 50s to 60s came and deposited between
300 million won and 1 billion won on average," he said.
Shares of Samsung SDS are currently traded at nearly double the IPO price on the over-the-counter market, giving investors hope for large returns when the deposit interest is low and the stock market performance is mediocre.
Established in 1985, Samsung SDS' sales reached 4.6 trillion won in 2013, with a net profit of 242.9 billion won.
Tech giant and Samsung Group's mainstay unit Samsung Electronics Co. holds a 22.58 percent share in the company, while the conglomerate's heir-apparent Lee Jay-yong holds 11.25 percent.
His two sisters -- Lee Boo-jin and Lee Seo-hyun -- each hold a 3.9 percent stake, while the group's effective head Lee Kun-hee holds a
0.01 percent stake.
Cheil Industries Inc., the de facto holding firm of Samsung Group, also filed for an IPO review late last month for a listing scheduled for Dec. 18. Formerly known as Samsung Everland Co., Cheil Industries is at the forefront of the conglomerate's business structure through a complex web of cross-shareholders. Cheil's IPO is estimated at 1.5 trillion won, making the largest in the country in more than four years.
The country's largest family-run conglomerate is said to be revamping its structural organization after Lee Kun-hee's sudden hospitalization from a heart attack. The 72-year-old's vacancy was followed by a set of mergers and IPOs, initiating a speedy transfer of management to his children.
The IPOs are expected to generate cash to be used to fund the three heirs' stake purchases, tax payments and other costs needed to fortify their standing in the Samsung empire. (Yonhap)
