Krafton Inc, the South Korean company behind the worldwide popular video game “PlayerUnknown’s Battlegrounds”, plans to raise $5 billion in an initial public offering, which would be the largest such listing for the country.
According to the regulatory filing by Krafton, it will offer 10 million shares, including 7 million new shares and 3 million existing shares, at an indicative range of 458,000-557,000 won per share.
If the offer price is fixed a the upper end, then this listing would beat Samsung Life Insurance’s 4.9 trillion won IPO in 2010. It is likely to top that of Coupang, the leading South Korean ecommerce company that raised $4.6bn in New York in March.
The pricing is expected to be decided by July 9, ahead of its July 22 listing date.
The multiplayer game PUBG has raised a storm across the globe, so much so that some countries (India) even banned it for some time. It has sold 25 million copies on PC and game consoles. Its mobile version has been downloaded more than 1billion time. It is one of the fastest-selling games since its launch in 2017.
Two new games are on the anvil this year by Krafton, based on the PUBG, including mobile game “PUBG: New State” and “Battlegrounds Mobile India” targeting the Indian market.
“Despite our successful experience in entering overseas markets, our past experience does not guarantee our future success given the different language, culture, custom and legal, regulatory environment,” Krafton said in its filing.
Taking it a step further and riding on its immense popularity, the company is also expanding into web-based cartoons, movies and animation, most likely funded by the IPO. It is also investing in deep learning to take advantage of AI-based targeting of consumers.
Krafton reported 1.67 trillion won in revenue in 2020, and its operating profit doubled to 774 billion won from 2019.
South Korea is seeing a record number of IPOs this year and analysts say that approximately 20 trillion won might be raised in 2021, which is about four times above 2020 levels. The extra interest by investors is propelled by its quick recovery from Covid-19 and low interest rates. The benchmark Kospi index is trading near all-time highs.
“This year is unprecedented in the concentration of huge new listings on the KOSPI with market capitalisations that range from trillions of won to tens of trillions of won,” said Choi Jong-kyung, an analyst at
“The Krafton IPO will be popular among investors, given investors’ growing interest in new growth areas such as EV batteries, games and online businesses,” said an investment banker in the know-how about the listing plans. “But the company is heavily reliant on just one game and it is uncertain how long the game’s popularity will last.”
Some analysts feel that the listing is overpriced compared to other such companies in the market whose valuations are lower but their revenues are higher than Krafton.
Krafton, founded by Chang Byung-gyu in 2007., started off its journey named Bluehole. PUBG, released in 2017 propelled the company into the big game, and accounts for the bulk of its revenues.
Mirae Asset Securities is lead advisor for the IPO, while Credit Suisse, NH Investment & Securities, Citigroup and JP Morgan are also advisors.
According to the regulatory filing by Krafton, it will offer 10 million shares, including 7 million new shares and 3 million existing shares, at an indicative range of 458,000-557,000 won per share.
If the offer price is fixed a the upper end, then this listing would beat Samsung Life Insurance’s 4.9 trillion won IPO in 2010. It is likely to top that of Coupang, the leading South Korean ecommerce company that raised $4.6bn in New York in March.
The pricing is expected to be decided by July 9, ahead of its July 22 listing date.
The multiplayer game PUBG has raised a storm across the globe, so much so that some countries (India) even banned it for some time. It has sold 25 million copies on PC and game consoles. Its mobile version has been downloaded more than 1billion time. It is one of the fastest-selling games since its launch in 2017.
Two new games are on the anvil this year by Krafton, based on the PUBG, including mobile game “PUBG: New State” and “Battlegrounds Mobile India” targeting the Indian market.
“Despite our successful experience in entering overseas markets, our past experience does not guarantee our future success given the different language, culture, custom and legal, regulatory environment,” Krafton said in its filing.
Taking it a step further and riding on its immense popularity, the company is also expanding into web-based cartoons, movies and animation, most likely funded by the IPO. It is also investing in deep learning to take advantage of AI-based targeting of consumers.
Krafton reported 1.67 trillion won in revenue in 2020, and its operating profit doubled to 774 billion won from 2019.
South Korea is seeing a record number of IPOs this year and analysts say that approximately 20 trillion won might be raised in 2021, which is about four times above 2020 levels. The extra interest by investors is propelled by its quick recovery from Covid-19 and low interest rates. The benchmark Kospi index is trading near all-time highs.
“This year is unprecedented in the concentration of huge new listings on the KOSPI with market capitalisations that range from trillions of won to tens of trillions of won,” said Choi Jong-kyung, an analyst. “The Krafton IPO will be popular among investors, given investors’ growing interest in new growth areas such as EV batteries, games and online businesses,” said an investment banker in the know-how about the listing plans. “But the company is heavily reliant on just one game and it is uncertain how long the game’s popularity will last.”
Some analysts feel that the listing is overpriced compared to other such companies in the market whose valuations are lower but their revenues are higher than Krafton.
Krafton, founded by Chang Byung-gyu in 2007., started off its journey named Bluehole. PUBG, released in 2017 propelled the company into the big game, and accounts for the bulk of its revenues. Mirae Asset Securities is lead advisor for the IPO, while Credit Suisse, NH Investment & Securities, Citigroup and JP Morgan are also advisors.
