
Korean IT solutions provider LG CNS made its stock market debut on the nation’s main bourse Kospi on Wednesday, reaffirming its commitment to becoming a global AI transformation, or AX, company.
During the listing ceremony at the Korea Exchange, CEO Hyun Shin-gyoon said, "Leveraging this IPO as a new momentum, we will pioneer innovative technologies and services that enhance customer value and solidify our position as a leader in AI transformation."
“LG CNS has grown alongside its customers not only in the traditional IT service sector but also in emerging technology fields such as AI, cloud and smart engineering. Please stay tuned for the future of LG CNS as it transforms into a global AX specialist company,” he added.
On its first trading day, LG CNS started trading at 60,500 won ($41.75) and remained below the IPO price of 61,900 won throughout the trading session. The stock ended trading at 55,800 won, down 9.85 percent from its IPO price.
LG CNS, with a market capitalization of about 6 trillion won based on its IPO price, is considered one of the largest IPOs in the first half of the year. Investor anticipation was high during the prelisting process.
During the public subscription period on Jan. 21-22, the company attracted over 21 trillion won in subscription deposits from retail investors. The institutional demand was equally strong, with 2,059 domestic and international institutions participating in the book building process, leading to a competitive bid ratio of 114-to-1.
Nearly 99 percent of participating institutional investors offered bids at or above the upper end of the price range, allowing LG CNS to finalize its IPO price at the highest end of its target band (53,700-61,900 won).
LG CNS plans to reinvest about 600 billion won of the funds raised through its Kospi listing into research and development for digital transformation, strengthening global competitiveness, and expanding AI and cloud capabilities. Of this, around 330 billion won will be allocated for acquiring overseas IT companies.
Amid the sluggish performance of newly listed stocks these days, analysts suggest that LG CNS' stock movement could significantly influence the broader IPO market.
Na Seung-doo, an analyst at SK Securities, said, "LG CNS has reignited investor interest in the stagnant IPO market. Various factors, including the high proportion of existing shares sold, the number of tradable shares post-listing, and the listing of subsidiaries within large corporate groups, may impact the IPO market's trajectory this year, making LG CNS' stock performance a key indicator."
Through this IPO, the IT solutions provider issued a total of 19,377,190 shares, half of which were existing shares sold by Crystal Korea, a special-purpose company managed by Macquarie Asset Management. Crystal Korea has agreed to retain its remaining stake of 21.5 percent for six months post-IPO.
By Jie Ye-eun (yeeun@heraldcorp.com)