Korean stocks' IPO market experienced a sharp freeze in the first half of 2025, with 15 of 19 newly listed companies trading below their offering prices. The downturn stemmed from reduced new listings, severe underperformance of newly listed stocks, and capital concentration in select large-cap semiconductor stocks. Fashion brand operator PeacePeace Studio plunged 73.77% below its offering price, while autonomous driving software firm StradVision fell 59.04%. First-half IPO volume dropped to 17 companies excluding SPACs, half the 38 companies in the same period of 2024, with total offering amounts declining 49% year-over-year to 1.13 trillion won. Market analysts attribute the weakness to overlapping listing regulations, stricter listing reviews, and investor focus shifting to a narrow group of large-cap technology stocks, leaving the IPO market relatively neglected.
First-Half Performance Shows Widespread Underperformance
According to the financial investment industry, as of the closing price, only four of 19 newly listed companies in 2025 traded above their offering prices: License Medical (55.18%), Cosmo Robotics (126.33%), MakinaRocks (102.87%), and Justec (11.68%). PeacePeace Studio recorded the steepest decline, closing at 5,640 won on the reporting date, down 73.77% from its offering price of 21,500 won. The company, which operates fashion brand 'Mardi Mercredi' and was expected to become a K-fashion unicorn, plunged over 36% on its first trading day and continued its decline.
StradVision traded at 4,915 won, down 59.04% from its 12,000 won offering price. The stock opened below its offering price on the first day and closed down the daily limit of 40.00%, dampening investor sentiment. Other significant decliners included Onepass (-69.37%), S-Tim (-50.06%), Inventera (-49.52%), Chaebi (-47.80%), K Bank (-32.53%), Mezu (-30.56%), and Kanapthera Therapeutics (-30.30%). Madup and Lemon Healthcare, which listed in July, fell 12.13% and 6.00% below their offering prices respectively.
New listing schedules remained sparse, with only three companies—Lemon Healthcare, Remedy, and HLGenomics—completing IPOs in July. First-half 2025 saw 17 new listings excluding SPACs, less than half the 38 companies in the first half of 2024. Total offering amounts reached 1.13 trillion won, down 49% from 2.21 trillion won in the prior-year period, while listing market capitalization totaled 7.36 trillion won, half the previous year's 14 trillion won.
Park Jong-sun, a researcher at Eugene Investment & Securities, stated, "The IPO market in the first half of this year was sluggish, with significant decreases in the number of listed companies and offering amounts compared to the same period last year." He added, "The expected number of IPO companies in July 2025 is also significantly lower than the past monthly average of 14 companies."
Sono International Files KOSPI Preliminary Review with 3 Trillion Won Valuation
The securities industry identifies large-scale IPOs as a key focus for the second half. Large IPOs carry significant influence on overall investor sentiment due to their offering size and market attention. Successful listings of major deals can attract institutional and retail funds back to the IPO market and accelerate subsequent companies' listing plans.
Sono International, with an estimated corporate value of around 3 trillion won, filed a KOSPI listing preliminary review. Cosmetics ODM company B&B Korea and AI infrastructure firm Elice Group also submitted listing preliminary reviews. Large conglomerate affiliates including HD Hyundai Robotics, Hanwha Energy, and DN Solutions selected lead underwriters and are preparing IPOs.
Approximately 40 companies filed IPO reviews to pursue second-half listings, a slight increase from the first half. Park Jong-sun noted, "If things proceed as planned, companies that receive approval 1-2 months after filing IPO reviews will actively proceed with IPOs, so the IPO market is expected to gradually recover from the end of the third quarter to the fourth quarter."
Capital Markets Act Amendment Introduces Pre-IPO Demand Forecasting
Regulatory reforms are scheduled to support IPO market recovery. Financial authorities introduced a system in July 2024 that prioritizes allocation of IPO shares to institutional investors who pledge holding commitments. The priority allocation ratio expanded from 30% last year to 40% this year, encouraging participation from mid- to long-term institutional investors.
The Capital Markets Act amendment passed by the National Assembly plenary session in April includes provisions allowing lead underwriters to conduct pre-IPO demand forecasting to determine the desired offering price band before disclosing the securities registration statement. A 'cornerstone investor' system will be introduced, permitting advance allocation to institutional investors who lock up shares for six months or more before filing the securities registration statement.
Tae Yoon-sun, a researcher at KB Securities, explained, "With the introduction of pre-IPO demand forecasting and the cornerstone investor system, it will be possible to secure mid- to long-term institutional investors more stably, which is expected to have a positive effect on IPO market recovery."
FAQ
Q: How many newly listed Korean stocks are trading below their offering prices in 2025?
A: As of the reporting date, 15 of 19 newly listed companies in 2025 are trading below their offering prices, with only four companies—License Medical, Cosmo Robotics, MakinaRocks, and Justec—recording gains above their offering prices.
Q: What caused the Korean stocks IPO market freeze in the first half of 2025?
A: Market analysts attribute the freeze to overlapping listing regulations, stricter listing reviews, and capital concentration in select large-cap semiconductor stocks, which left the IPO market relatively neglected and caused severe underperformance of newly listed stocks.
Q: What regulatory changes are planned to support Korean stocks IPO market recovery?
A: The Capital Markets Act amendment passed in April introduces pre-IPO demand forecasting to determine offering price bands and a cornerstone investor system allowing advance allocation to institutional investors who lock up shares for six months or more before securities registration statement filing.
