South Korea's initial public offering (IPO) market has experienced a significant downturn in 2026, with only 15 new listings raising approximately $700 million as of June 3, according to LSEG data. This marks a sharp decline compared to the annual average of 80 listings and $8 billion in proceeds between 2020 and 2025. In contrast, Malaysia's IPO activity and proceeds have nearly doubled those of South Korea this year [1].
The slump is attributed to ongoing government efforts to enhance corporate valuations and reform governance structures, particularly targeting the dominance of Chaebols—large family-run conglomerates. The government has implemented the 'Corporate value-up initiative' in 2024 to address the 'Korea discount,' where South Korean shares trade at lower valuations than their global peers. This initiative includes three rounds of amendments to the Commercial Act aimed at strengthening minority shareholder protection and improving corporate governance [1].
A key policy shift involves restricting parent-subsidiary listings, which are seen as diluting parent company value and disadvantaging minority shareholders while allowing controlling families to maintain influence. Korea Exchange CEO Jeong Eun-bo stated that such listings will 'be prohibited as a general principle.' Additionally, the Korea Exchange plans to delist around 300 'zombie' companies by next year to redirect capital toward new ventures and curb unfair trading practices [1].
Despite the IPO market's struggles, the Kospi index has more than doubled in value over the past year, making it the top-performing major index globally as of Monday. However, the five largest conglomerates—Samsung, SK, Hyundai Motor, LG, and HD Hyundai—still account for about 70% of South Korea's equity market capitalization. Cross-shareholdings among listed companies represented around 11% of total market cap last year, significantly higher than Japan (4%) and Taiwan (3%) [1].
CONCLUSION
South Korea's IPO market is facing a downturn due to governance reforms and restrictions on Chaebol-driven listings, even as the broader equity market performs strongly. The government's ongoing initiatives aim to improve market transparency and foster new listings, but the transition is currently weighing on IPO activity.