Korean IPO Subscription (Gongmoju) Explained: How Allocation, Deposits and Refunds Work in 2026

What is Korean IPO subscription?

Korean IPO subscription is the process by which retail investors apply, through a brokerage app and with a cash deposit, for a slice of shares offered to the public before they list on KOSDAQ or KOSPI. Locals call these shares gongmoju (공모주).

This guide is written for an English-speaking reader in the US who follows Korean markets, and everything below is specific to South Korea. The rules are not the US ones, and I will flag where a US reader’s intuition breaks. As of November 3, 2026, I have confirmed the structure and the numbers I quote, and I say so when I could not open a primary document. Nothing here is a recommendation to buy or avoid any company.

Why do Korean IPOs get so much attention?

Because the retail door is wide open for locals. In the US, most individuals get an IPO allocation only through a few brokerages, and the amount is usually small and discretionary. In Korea, a fixed share of every deal is reserved for ordinary subscribers, and a part of that must be handed out equally. That rule turns IPO applications into a mainstream habit rather than a privilege.

How does a Korean IPO move from bookbuilding to listing?

It moves through five stages: institutional bookbuilding, offer price fixing, retail subscription, payment and refund, and listing. Retail investors take part from the third stage onward.

Stage	Who acts	What happens	What retail watches
Bookbuilding (수요예측)	Institutions	Funds submit price and quantity bids to the underwriter	Oversubscription ratio, share of bids at or above the top of the range, lock-up pledges
Offer price fixed	Issuer and lead underwriter	Final price announced, within or outside the indicated range	The final price, which sets your deposit
Retail subscription	Individuals	Two-day window; enter shares and post the deposit	Which broker handles the deal, cut-off time, minimum lot
Payment and refund	Brokers	Allocated shares are paid for; the rest of the deposit is released	Refund date, when the cash is locked up
Listing	Korea Exchange	Trading starts on KOSDAQ or KOSPI	Official listing date, opening price band

The most common beginner mistake is timing. The subscription window is only two business days, the last day often closes in the afternoon rather than at the market close, and the right brokerage is whichever firm underwrites that deal, not the one you already use. If your regular broker is not an underwriter, you simply cannot subscribe there.

The Korean regulator’s disclosure system, DART, hosts each issuer’s securities registration statement, where the dates, price range, underwriters and allocation percentages are written down. The exchange’s KIND disclosure portal carries the confirmed listing date. News sites and calendar blogs lag behind amendments, so treat them as a convenience.

How are shares allocated to retail investors in Korea?

A minimum share of each deal goes to general (retail) subscribers, and at least half of that tranche is distributed equally. The remainder goes by the size of your request. The framework dates from rule changes in late 2020, applied to subscriptions from January 2021.

Here is what I could confirm. Rule summaries and the Korea Exchange’s listing guidebook describe the retail tranche as 25% or more of the offering, and describe at least half of the retail tranche going through the equal method, with the rest proportional. The Korea Financial Investment Association’s rule database still shows an older 20% wording in at least one version of the underwriting rule. I could not open the full legal text during research, so for any real deal, read the allocation section of the registration statement instead of trusting a summary, including mine. Some brokers also set a higher equal share on specific deals.

	Equal allocation	Proportional allocation
Basis	Everyone who posts the minimum deposit gets the same chance	Shares split by the quantity you asked for
Share of retail tranche	At least half	The rest
Who benefits	Small subscribers	Those willing to lock up large deposits
Typical outcome in a hot deal	A handful of shares, sometimes one or two	A tiny fraction of the quantity requested
Capital at risk	Small	Large

A made-up example shows how it feels. Suppose the retail tranche is 1 million shares, half of it equal, and 500,000 people apply. The equal pool of 500,000 shares works out to about one share each. Someone who asked for 10 shares might receive one or two. Someone who put in a huge proportional order might receive less than 1% of what they asked for in a deal oversubscribed hundreds of times. The numbers are illustrative only.

What are single, split and multiple subscription methods?

Brokers may run the retail book in a single request, where you enter the total and the broker handles the equal and proportional parts for you, or in a split format where the two tranches are applied for separately. Which one a deal uses is stated by the broker, so read the app screen before you submit. Duplicate subscription across several underwriters for the same stock is restricted, which means you generally pick one broker per deal.

How big is the deposit and when do you get money back?

The retail deposit rate is 50% of the offer price times the number of shares requested. Whatever is not allocated to you is refunded on the refund date, and until then the cash is locked.

Here is an illustration with invented round numbers. If the final offer price is 20,000 won and you request 100 shares, the subscription value is 2,000,000 won and the deposit is 1,000,000 won. If you are allocated one share, 20,000 won is paid for the stock and 980,000 won comes back on the refund day. The cost is not the refund, it is the days of idle money and the risk that the one share you received falls below its cost.

Item	Illustration	Note
Offer price	20,000 won	Varies by deal
Shares requested	100	Broker sets minimum lot and cap
Subscription value	2,000,000 won	Price times shares
Deposit at 50%	1,000,000 won	Due within the subscription window
Shares allocated	1	Depends on oversubscription
Refund	980,000 won	Paid on refund date

If you compare this to a US high-yield savings account, a few days of 4% on a few hundred dollars is pennies, so the cash cost is low. The real price of subscribing is attention and the chance of a loss on the shares you receive. For a general sense of where a US saver’s alternatives sit, see this overview of Korean savings account rates.

How should you read oversubscription and lock-up numbers?

Oversubscription shows how crowded institutional demand was, and lock-up pledges show how much of the institutional allocation promised not to sell right away. Both are inputs, and neither fixes the first-day price.

A very high oversubscription ratio often pushes the final offer price to the top of the range or above it. That means you pay more for shares even though demand looks strong, and it means the headline can cut either way. Lock-up pledges are a rough gauge of near-term selling pressure. A larger share of pledged shares with long periods (1, 3 or 6 months) pushes the supply into the future. When those shares unlock, the supply can arrive in one go. Neither measure tells you whether the business is worth the price.

Is there a mandatory lock-up for retail investors?

No. Retail allocations are not locked up, so you can sell as soon as the shares are credited and trading opens. That freedom is exactly why first-day behavior is volatile.

What happens on listing day?

On listing day, my understanding is that the opening price is determined within a band of roughly 90% to 200% of the offer price, and the stock may then move by as much as 30% in either direction during the day. This structure came in during 2023, so verify the current rules with the exchange notice rather than my summary.

A composite example of a mistake

The following is a composite I built from a common pattern, not a real company or a real investor. Imagine a deal with an extremely high bookbuilding ratio and an offer price fixed at the top of the range. A subscriber, excited by the headline, puts a large amount into the proportional pool and receives a small number of shares. On listing day the opening price lands near the offer price, drifts lower during the session, and the shares are sold at a small loss. After brokerage commission and the sales transaction tax, the result is barely worth the days of locked money. The lesson is not that every deal behaves this way. It is that a “hot” ratio and a profit are different things.

Because of that volatility, a sensible habit is to decide your position size and exit rule before the deal, not on listing day. That is a process point, not advice about what to do.

Which recent Korean IPOs are people searching for?

Three Korean IPO names have been trending in local search: Dongwon Parts, Younggwang and Baropharm. Here is what I could find in news and calendar reports as of November 3, 2026, and I could not match everything against the original filings, so check DART before relying on any date.

Company	Bookbuilding	Retail subscription	Payment or refund	Lead underwriter	Indicated range	Listing date
Dongwon Parts (동원파츠)	Oct 22 to 28	Nov 2 to 3	Nov 5	Samsung Securities	23,000 to 26,500 won	Not confirmed
Younggwang (영광, formerly Younggwang Gongjakso)	Oct 13 to 19	Oct 22 to 23	Oct 27	Korea Investment & Securities	14,000 to 17,000 won	One report said KOSDAQ listing Nov 2; another schedule showed it as undecided
Baropharm (바로팜)	Not confirmed	Nov 2 to 3 per some sources	Nov 5	Mirae Asset Securities	16,400 to 20,200 won	Not confirmed

Some further details from those reports. Dongwon Parts was reported to be offering about 2.03 million shares, with the final price not confirmed in what I saw. Younggwang’s bookbuilding was reported at a 1,000.1 to 1 ratio, with 2,276 institutions taking part and roughly 98.9% of bid volume at or above the top of the range. Baropharm was reported at 1.78 million shares and a total raise of roughly 29.2 billion to 36.0 billion won. A separate company with a similar name, Younggwang YKMC, was reported to have its own bookbuilding (Oct 27 to Nov 2) and retail subscription (Nov 4 to 5). Confirm the ticker before doing anything in a brokerage app.

None of this is a view on whether any of the three is a good investment. It only shows what the dated process looks like in practice, and where my sources disagreed or went silent, I wrote “not confirmed”.

Can foreign investors subscribe to Korean IPOs?

It is limited and depends on the broker, and I could not verify a current broker-by-broker answer. Treat the following as a checklist, not as a conclusion.

• Foreign individuals generally need an investor registration with the Financial Supervisory Service to trade Korean-listed stocks directly.
• You then need an account at a Korean broker that accepts non-resident clients, and many do not offer IPO subscription to them.
• Retail IPO products at the big Korean app brokers are typically built around a Korean resident registration number, which is a hurdle for foreigners.
• Some international brokers offer access to Korean markets after listing, which lets you trade the stock on the exchange but not take part in the retail subscription itself. Check yours for KOSDAQ access and fees.

If you cannot subscribe, the alternative is to watch the deal and decide later whether you want to buy on the open market. The offer price is just a reference point, not a floor.

Do taxes matter for Korean IPO shares?

They do, and the rules differ from the US. For US residents, gains on foreign stocks are generally reportable to the IRS, and foreign currency movements can matter. I won’t go into Korean tax mechanics for non-residents here because I did not verify them. For the US side of the picture, the basics of capital gains reporting are covered in this stock capital gains tax guide, and the way a diversified fund can keep that process simpler is discussed in ETF vs individual stocks. If you hold the shares through a US broker, ask for a year-end statement that shows the currency conversion.

Is IPO subscription worth the effort compared with simply investing?

For most people the payoff from an equal allocation is a handful of shares, so the effort should match the size. The upside from an IPO is lumpy, the downside is real, and the time spent following deals competes with other things you could do with the same attention. Investors who prefer a steadier approach often lean on funds, and the comparison between theme-driven picks and broad funds is explored in the AI stocks guide and the SCHD dividend ETF guide.

I find IPO subscription most useful as a learning tool. You see how pricing, demand and supply work from the inside, with small amounts. The mistake is treating it as a reliable income stream. That is my opinion rather than a fact, and your circumstances may differ.

A short pre-subscription checklist

1. Find the issuer’s registration statement on DART and read the allocation, use of proceeds and risk sections.
2. Confirm the underwriter and whether you can open an account there.
3. Write down the subscription window and the cut-off time on the last day.
4. Compute the deposit with the final offer price, not the indicated range.
5. Note the refund date and the official listing date from KIND.
6. Decide your size and your exit rule before you subscribe.

This article is general information, not investment advice or a recommendation about any company. Offering schedules, prices, allocation percentages, listing dates and rules for foreign investors can change through amended filings and broker notices. Verify everything with DART, the Korea Exchange’s KIND portal, and the underwriting broker before acting. Investing carries risk, including loss of principal.