November 22, 2024

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Coupang trucks are parked in a lot in Seoul. (Yonhap)

Coupang Inc. looks to raise as much as $3.6 billion in fresh funds via an initial public offering, which would likely be among the largest deals in the US market this year.

In a regulatory filing submitted to the US Securities and Exchange Commission on Mar. 1 there, Coupang Inc. said it plans to offer 120 million shares -- 100 million new Class A shares in the IPO and 20 million shares to existing investors -- in a price band between $27 and $30.

The firm will consist of two classes of common stocks, with each Class A share entitled to one voting right and Class B shares with 29 voting rights given to its founder and CEO Kim Bom-seok, directors and executive officers totalling 12 people, the S-1 filing showed.

The SoftBank Vision Fund will own about 36.8 percent of the company’s Class A shares after the offering. Led by Japanese billionaire Masayoshi Son, the SVF invested $2 billion into the firm in 2018, after SoftBank Group’s prior investment worth $1 billion in 2015. BlackRock and Greenoaks Capital are also among the online retailer’s investors.

In line with Coupang Inc.’s listing attempt, media outlets outside of Korea have headlined it as “the fourth-biggest listing on record by an Asian company on the US exchange” or “the largest IPO by a foreign company since Alibaba Group in 2014.”

Delaware-based Coupang Inc. owns 100 percent stake in its subsidiary that operates the largest e-commerce business based in Korea. The firm submitted its initial S-1 filing, a regulatory form used by domestic entities, to the SEC last month.

Most local brokerage houses evaluate Coupang Inc.’s price-sales ratio -- a valuation metric for stocks -- at around 1.8-3.1 times. A lower PSR indicates a company is undervalued. Compared to other global e-commerce firms such as eBay (3.6 times) and Alibaba (6.6 times), the firm’s valuation is somewhat lower, they explain.

Although Coupang Inc. may attract investors with its relatively lower price valuation, it still faces a bumpy road to a market debut, one local analyst told The Korea Herald on condition of anonymity.

“We need to wait and see how the rest of the listing process goes, but the surging US bond yields and the fear of volatility that applies to global markets will likely be a burden for the IPO,” the expert said.

Goldman Sachs, Allen & Co, JP Morgan and Citigroup serve as the lead underwriters, with HSBC, Deutsche Bank Securities, UBS Investment Bank, Mizuho Securities and CLSA participating in the IPO as members of the underwriter group. Bank of America, which was previously mentioned as one of the underwriters in last month’s registration document, disappeared from the recent filing.

By Jie Ye-eun (yeeun@heraldcorp.com)