Ellis Group, an artificial intelligence (AI) infrastructure company, saw its shares drop more than 29% on the first day of trading on the KOSDAQ. Despite strong demand during the institutional and retail subscription phases, the stock has been trading below its initial public offering (IPO) price since its debut.
According to the Korea Exchange, as of 9:35 a.m. on October 20, Ellis shares were trading at 63,400 won, down 27,100 won (29.94%) from the IPO price of 90,500 won.
Ellis Group recorded a high subscription rate during its IPO process. From October 7 to 8, the subscription rate for retail investors was approximately 408 to 1, with total subscription deposits reaching about 10.26 trillion won. For institutional investors, 2,367 domestic and foreign institutions participated in the demand forecast, achieving a competition rate of 388.84 to 1.
The IPO price was set at the upper end of the proposed range of 70,400 won to 90,500 won. The total amount raised through the IPO was approximately 201.1 billion won, leading to an expected market capitalization exceeding 1 trillion won at the IPO price. However, with the stock price falling significantly below the IPO price on its first day, the market capitalization has also dropped below the valuation based on the IPO price.
Founded in 2015, Ellis Group provides AI computing infrastructure, cloud services, and industry-specific AI transformation (AX) solutions. The company started with an AI education platform and has since expanded into GPU cloud and data center services. It has established a business structure that encompasses everything from infrastructure development to operation based on its self-developed modular AI data centers.
The company is experiencing growth in its financial performance. In the previous year, Ellis Group reported consolidated revenues of 39.5 billion won and an operating profit of 5.2 billion won. In the first half of this year, it recorded revenues of 34.4 billion won and an operating profit of 10.3 billion won.
Ellis plans to use the funds raised from this IPO to build AI data centers and expand its overseas operations. The company aims to enhance domestic AI infrastructure, particularly outside the capital region, while also expanding its data center and AX solution businesses in the United States, Singapore, and Japan.
* This article has been translated by AI.
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