EV battery maker LG Energy Solution becomes South Korea’s second most valuable firm in IPO debut

South Korea’s electric vehicle battery maker LG Energy Solution made a successful market debut on Thursday. The market capitalization of LG Energy stood at $98.3 billion (118 trillion KRW) at the close of trading on local stock exchanges, making it the country’s second most valuable firm after Samsung Electronics.

The firm’s stock price opened at 597,000 KRW ($496), nearly 99% up from its initial public offering price of 300,000 KRW ($250) apiece before falling as much as 25% in early trade and ending the day 68.3% higher.

The world’s second largest EV battery maker after Chinese CATL raised 12.8 trillion KRW ($10.8 billion), which valued the company at $59 billion, last week in South Korea’s largest IPO.

LG Energy has approximately 23% of the global EV battery market, with customers including Tesla, General Motors and Volkswagen, according to a sector analyst. In comparison, China’s CATL topped with about 35% market share. The analyst also noted that Japan’s Panasonic and Chinese BYD account for roughly 13% and 7% share, respectively.

With the IPO proceeds, LG Energy plans to increase its production capacity in the global markets. The firm also wants to form additional strategic partnerships with car makers in the U.S., Europe and China to take on its global competitors.

Spun out of LG Chem in December 2020, LG Energy has more than 30,000 employees and develops lithium-ion batteries for EV, mobility, drones, ships, IT applications and energy storage systems. After the listing, its parent company LG Chem will hold an 81.8% stake in LG Energy.

Last June, the Seoul-based firm suspended its IPO process on the heels of a series of recalls from General Motors’ Chevrolet Bolt electric vehicles due to possible battery cell defects that could increase fire risk.

In July, the company said its plan is to invest $5.2 billion in battery materials by 2025. LG Energy announced earlier this week its plan to build a $2.6 billion EV battery plant in the U.S with General Motors.