SEOUL -- Kakao Bank has confirmed its initial public offering price at the upper end of its suggested range, clearing a major hurdle in advance of the digital lender's listing on South Korea's benchmark stock market next month.
Kakao Bank said Thursday that it fixed its IPO price at 39,000 won ($34) per share, the top end of the range between 33,000 won and 39,000 won that it previously presented, as institutional investors showed huge interest in the stock.
A total of 1,667 institutional investors in South Korea and abroad applied for a combined 623 million shares, meaning the issue was 1,733 times oversubscribed. The internet-based lender could raise up to 2.6 trillion won through its plan to offer 65 million shares to all investors, giving it a market capitalization of 18.5 trillion won to become the third-largest financial company on the Kospi index.
Kakao Bank will accept applications from retail investors on Monday and Tuesday, before starting trading on Aug. 6. Kakao Bank employees are also eligible to receive shares.
"I appreciate deeply the institutional investors who agreed with our growth potential and differentiation strategy," said Kakao Bank CEO Yun Ho-young in a statement. "I expect retail investors' interest and encouragement as well."
The announcement comes as big-name South Korean IPO candidates face regulatory objections to their valuations. Kakao Pay, the digital bank's sister company, was forced to put its planned IPO on hold as the Financial Supervisory Service demanded last week that the fintech company correct its prospectus, saying it could mislead investors.
Krafton, the country's leading game developer, also cut its IPO price by more than 10% earlier this month, yielding after the regulator declined to accept its initial registration form.
Kakao Bank has challenged traditional rivals by offering quick and easy financial services through its mobile app. It is South Korea's biggest digital lender, with 16.2 million customers using its mobile app as of March. Its app is the most popular in the finance industry as well, with 13.4 million monthly active users.
Kakao Bank and Kakao Pay are both affiliates of internet company Kakao, known for its KakaoTalk instant messaging service.