The maintenance and repair unit of South Korea’s biggest shipbuilding conglomerate HD Hyundai Marine Group share jump was about 43.8% in their stock market debut on Wednesday. The rise in HD Hyundai Marine Solution stock was seen after the company completed the country’s biggest initial public offering (IPO) in more than two years.
HD Hyundai Marine Solution raised 742.3 billion won ($545 million) in its IPO last month, allocating 8.9 million shares, or 20% of its stock.
Hyundai Marine Solution IPO
Hyundai Marine Solution IPO was by far the largest on the Korea Exchange (KRX) since LG Energy Solution raised 12.8 trillion won in January 2022 in South Korea’s biggest-ever IPO.
The ship-repair unit of South Korea’s largest shipping conglomerate HD Hyundai Group sold 8.9 million shares in the initial public offering. The IPO totaled 742.26 billion won, valuing the newly public unit around 3.71 trillion won at the offering price.
About 4.45 million of the IPO shares are newly issued.
Life to subdue South Korea Market
The Hyundai Marine listing comes as Seoul’s IPO market has remained subdued for the past couple of years. Kurly, an ecommerce startup, suspended its IPO plan last year due to unfavorable market conditions.
Hyundai Marine investments
Hyundai Marine said that it will invest the IPO funds in establishing logistics centers in ports as well as for mergers and acquisitions.
HD Hyundai, the parent of Hyundai Marine, remains the largest shareholder with a 55.8% stake, followed by investment firm KKR with 24.2%. The U.S. private equity major raked in half the money raised in the IPO, or 371.2 billion won, selling 4.45 million shares. KKR has a director’s seat in the company’s seven-member boardroom.
IPO oversubscribed
The company’s IPO showed strong investor interest, with both the institutional and retail offering oversubscribed by over 200 times combined.
The Wall Street Journal, citing HD Hyundai officials, reported that the parent conglomerate, which held a 62% stake in its unit ahead of the IPO, will continue to be in control.
Meanwhile, KKR, the second-largest shareholder since 2021, plans to gradually reduce its stake, which currently stands at 38%.
Hyundai Marine products
Hyundai Marine offers products and services to container ships, liquefied natural gas carriers and others. Besides engine repair and maintenance, it installs exhaust-gas cleaning systems and a navigation system that suggests energy-saving routes using big data. The company is headquartered in the southern port city of Busan.
Investors participating in the IPO bet on the future of the company amid rising demand for ship repair and maintenance services due to environmental regulations.
The company is part of the larger HD Hyundai Group anchored by HD Hyundai Heavy Industries, the world’s biggest shipbuilder. HD Hyundai encompasses 32 companies involved in areas ranging from shipbuilding and robotics to refining and offshore engineering.
HD Hyundai Marine Solution stock
The company’s stock price rose to 119,900 won from its IPO price of 83,400 won per share on the KRX in opening trading, pushing its market value to 5.3 trillion won, the 68th biggest in the benchmark KOSPI index.
After about an hour of trading, the HD Hyundai Marine Group share were up 41.1% after having at one point a jump of as much as 45.1%.
