PUBG Maker Plans to Raise $5 Bn in Landmark Korean IPO

Krafton Inc, the company behind hit mobile game PlayerUnknown's Battlegrounds, filed to raise as much as 5.6 trillion won ($5 billion) in a South Korean initial public offering (IPO) that's likely to be the country's largest ever.

The gaming company will sell more than 10 million shares at 458,000 won to 557,000 won apiece, Pangyo-based Krafton said in a filing Wednesday. The top of the range exceeded general market expectations and would grant Krafton a market capitalization of 28 trillion won, based on the number of common shares. Krafton plans to finalize the price July 9 and list on July 22.

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Krafton is seeking to smash the record for the biggest debut among South Korean companies, previously held by Coupang Inc., which raised $4.6 billion in an IPO on the New York Stock Exchange in March. The largest listing on domestic exchanges had been Samsung Life Insurance Co.'s $4.3 billion share sale in 2010. Riding a boom in retail trading, Asia's fourth largest economy is on track for a record year of floats, with more deals from the likes of LG Energy Solution and Kakao's affiliates likely to come in the second half.

The key question Krafton will have to answer is whether it can grow to become more than a one-hit wonder. The company is almost wholly dependent on its blockbuster, genre-defining PUBG, which produced most of its 1.67 trillion won revenue last year, according to a regulatory filing. Analysts also worry about how much Covid-19 lockdowns helped Krafton's numbers over the past year — the company's filing showed sales dropped 11.6 per cent and operating profit was down 33 per cent in the first quarter of this year. Krafton's prospectus warns that the amount of time and money spent in its games could diminish as the global virus situation improves.