SEOUL, April 29 (Yonhap) — SK IE Technology Co. (SKIET), a battery materials subsidiary of SK Innovation Co., is set to draw a record-breaking subscription rate from retail investors for its initial public offering (IPO) on the Seoul bourse, the company’s IPO managers said Thursday.

SKIET, which makes lithium-ion battery separators used in electric vehicles, has allowed individual investors to subscribe to up to 5.34 million new common shares to be sold under the IPO on the main KOSPI market on May 11.

The battery material maker has set the IPO price at 105,000 won (US$94.60) per share, which would draw 2.2 trillion won.

The bookrunner, Mirae Asset Daewoo Securities, said it has received 22.1 trillion won of deposits on the first day of a two-day IPO public subscription period as retail investors ordered 78.93 times more than their allocated shares.

The deposit surpassed the previous record set by SK Bioscience Co., which drew 14.1 trillion won on the first subscription day. The vaccine development subsidiary of SK Group has recently signed a contract with the U.S. vaccine producer Novavax for the consignment production of its COVID-19 vaccines.

A total of 1,734 domestic and foreign institutional investors participated in a two-day book building period last week and oversubscribed 1,883 times, according to SKIET, marking the largest IPO ever in South Korea.

A Seoul branch office of Korea Investment & Securities Co. puts up a banner for SK IE Technology Co.'s initial public offering on the KOSPI market on April 28, 2021, on the first day of its two-day public subscription period. (Yonhap)

SKIET supplies battery separators to major EV makers, including Tesla and Volkswagen, taking up 26.5 percent of the global wet separator market, according to SNE Research.

Separators are one of the key components of EV batteries, which are important in preventing batteries from exploding in the charging process, and take up about 15-20 percent of battery production costs.

SKIET said it will use the proceeds from the IPO to expand production as the wet separator market is expected to face a supply crunch beginning in 2023 in line with growing EV demand.

Last month, SKIET announced a 1.13 trillion-won investment plan to build two more separator plants at an existing complex in Poland to step up its production capacity. It also has factories in South Korea and China.

SKIET posted 468.3 billion won in sales and 125.2 billion won in operating profits last year, its financial report showed.

The IPO process comes after SK Innovation earlier this month agreed to pay 2 trillion won to its bigger home rival LG Energy Solution Ltd. to put an end to a two-year legal battle over EV battery technology.