HLGnomics, a new entrant to the KOSDAQ market, plunged more than 30% on its trading debut. HLGnomics attracted more than 4 trillion won in subscription deposits during its initial public offering (IPO). However, institutional investors were reluctant to commit to long-term investment, resulting in a low mandatory lock-up ratio. About 82% of companies that newly listed over the past three months now trade below their offering prices.
According to the Korea Exchange, HLGnomics closed at 14,790 won on the 24th, down 31.21% from its offering price of 21,500 won. HLGnomics traded at 25,500 won, or 1.2 times the offering price, immediately after the market opened, and maintained gains of around 4% early in the session. But its gains later narrowed to the 1-2% range before turning negative, sending the stock below its offering price.
HLGnomics, a company that produces active pharmaceutical ingredients (API), achieved partial success during its IPO process. In the demand forecast for institutions conducted from the 2nd to the 8th of this month, investors clustered at the top of the desired offering price band (range of 18,500 to 21,500 won). Because 98.5% of institutions that participated in the demand forecast at the time submitted prices at or above the top of the band, the offering price was set at 21,500 won. In the subsequent general subscription, about 4.6 trillion won in subscription deposits was gathered at a competition ratio of 667.23 to 1.
However, institutions showed little intent for long-term investment. The mandatory lock-up ratio, under which participating institutions in the demand forecast pledge not to sell their shares for a certain period, stood at just 1.9% based on the requested volume. Of the total 1,374,549,000 shares that participated, 98.1%, or 1,348,308,000 shares, carried no mandatory lock-up commitment. The stock's weakness is attributed to institutions that did not commit to long-term holding releasing their shares into the market from the first day.
The share prices of companies that have recently listed on the market are wavering. According to exchange statistics, of the 11 companies that entered the market over the past three months, only two currently trade above their offering prices: Cosmo Robotics (up 138.50% from the offering price) and MakinaRocks (61.67%). The remaining nine companies, including Piece Piece Studio (-74.65%) and StradVision (-73.88%), all saw their share prices fall below their offering prices. Considering that companies typically discount their fair value based on measures such as the price-earnings ratio (PER) by about 25% during the IPO process, analysts describe this as an unusual phenomenon.
