Investors were attracted by Kakao’s growth prospects as the company more than doubled its trading debut on Wednesday, November 3, 2021.
Kakao Pay Corp is a South Korean financial services app that is backed by China’s Ant Group. Its listing and subsequent run in share price come as a relief for investors in the country. They were worried about South Korea’s intensified regulatory scrutiny on internet-based financial platform companies.
However, Kakao Pay could have opened room for more optimism and the likely subsequent IPO boom in the country. Investors are likely to think that there is room for IPOs, with prospects of creating value for their investments without fearing the risk of a regulatory crackdown on similar companies or internet-based financial platforms. South Korea is home to a sizeable, willing local investor-base that can take up shares in new listings.
Nevertheless, on Wednesday, Kakao Pay’s share price opened double the IPO price (90,000 Korean won), as it climbed to 193,000 won by early afternoon. This effectively gave the newcomer a market capitalization of 25.1 trillion won ($21.24 billion).
Kakao Pay started the payments services back in 2014 and has seen the business grow over the years. In 2020, annual transactions were recorded at 67 trillion won. This was coming from 48 trillion won recorded in transactions in the previous comparable period. Analysts forecasts transactions to grow to over 100 trillion won in 2021, giving more reasons for investors to buy the company’s shares.