South Korea’s music companies are dashing to go public to capitalise on rising world demand for Ok-pop that has pushed leisure sector listings within the nation to a report excessive.
Funds raised by leisure listings in Seoul this yr have hit a report $3.8bn, Dealogic information present, whereas shares within the nation’s main music companies have hit all-time highs as artists resume stay concert events and different occasions.
The worldwide reputation of Ok-pop stars together with seven-member boy band BTS and lady group Blackpink has prompted smaller companies to flock to the market.
RBW, the music label behind lady group Mamamoo, is anticipated to record on Monday, after elevating Won26.8bn ($22.5m) in its preliminary public providing. The IPO worth was set on the high finish of the vary, with the providing oversubscribed greater than 3,700 occasions.
“The IPO success vindicates the significance of music IPs and our firm’s progress prospects,” RBW’s president Kim Jin-woo advised the Monetary Instances. “We are going to proceed to make main killer content material for the worldwide market.”
RBW plans to make use of the IPO proceeds to speed up its world enlargement by buying extra music labels and IPs and signal on extra artists throughout Asia, mentioned Kim.
The corporate’s itemizing comes after Ok-pop fan communication platform operator DearU went public earlier in November. DearU, backed by each SM and JYP Leisure, raised Won85.8bn in its IPO, with the itemizing attracting big curiosity from each institutional and retail buyers.
Overseas buyers from about 20 establishments together with Singapore sovereign wealth fund GIC, JPMorgan Chase, Constancy and Allianz attended DearU’s investor relations session for the IPO.
The eye for the small South Korean firm was uncommon, with most overseas buyers historically centered on IPOs of massive Korean conglomerates. Greater than 100 corporations have raised a mixed Won20tn via IPOs thus far this yr, in accordance with Korea Trade.
“Traders are in search of a brand new goal on this scorching sector as they’re eager to trip on the Korea wave,” mentioned Choi Joon-chul, chief govt of VIP Analysis and Administration in Seoul. “DearU is one of the best instance of the trade’s new enterprise mannequin, utilizing the Ok-pop fandom.”
DearU’s inventory worth has risen greater than 240 per cent from its IPO worth to Won89,400. The corporate runs a subscription-based messaging platform and has plans to launch a platform that might enable stars and followers to work together in digital actuality.
DearU at current operates a platform known as “DearU bubble”, via which Ok-pop followers can work together with their favorite stars utilizing messages, images and movies. The corporate mentioned the platform boasts 236 artists and greater than 800,000 subscribers.
Funding bankers count on extra Ok-pop-related corporations to go public within the coming months following the success of Hybe, the label behind BTS, led by music IP buying and selling platform Music Cow, which is alleged to be making ready for an IPO as early as subsequent yr.
“Valuations are fairly excessive, reflecting their future progress potential. It stays to be seen whether or not they can stay as much as the excessive expectations,” mentioned Kim Joong-kon, head of fairness capital markets at NH Securities.