By Heekyong Yang and Jihoon Lee

SEOUL (Reuters) -LG Energy Solution Ltd (LGES) saw its shares almost double in price on their trading debut on Thursday, making the electric vehicle (EV) battery maker South Korea’s second-most valuable company.

LGES stock began trade at 597,000 won, 99% above the 300,000 won price set in South Korea’s biggest-ever initial public offering (IPO) which attracted a record $13 trillion in bids.

The stock fell as much as 25% in early trade but still left it second only to that of Samsung Electronics Co Ltd in terms of value, with a market capitalisation exceeding 105.3 trillion won ($87.62 billion) even at the lowest intraday level.

Spun out of LG Chem Ltd, LGES has over 20% of the global EV battery market, with customers including Volkswagen AG, General Motors Co and Tesla Inc.

Its debut will set the tone for upcoming IPOs in South Korea as retail investors, so-called ants, flock to the market with liquidity aided by the government’s pandemic stimulus policy.

Over 4.4 million retail investors bid a record $95 billion to subscribe to shares https://www.reuters.com/markets/europe/skoreas-lg-energys-108-bln-ipo-draws-record-demand-retail-investors-2022-01-19, in what was Asia’s largest equity fund raising since China’s Alibaba Group Holding Ltd raised $12.9 billion in its 2019 Hong Kong secondary listing.

But it was the electrification of transport that spurred almost 2,000 prospective foreign and domestic institutional investors to lodge bids worth about $12.7 trillion. Hopefuls often bid big for a greater chance of being allocated shares.

Fewer large equity deals in the rest of Asia is also luring institutional investors to South Korean offerings.

LGES’ market value is still dwarfed by the $208 billion of Chinese rival Contemporary Amperex Technology Co Ltd (CATL). Moreover, analysts have flagged growing competition from Chinese peers expanding globally as well as the prospect of automakers developing their own battery technology.

Still, Chief Executive Kwon Young-soo has said a 260 trillion won order backlog highlights LGES’ growth potential.

“The stock is trading at an expected level considering its discount to CATL. Bigger upside will be seen in the second half of this year and next year as its U.S. factories get closer to being fully operational,” said analyst Kang Dong-jin at Hyundai Motor Securities.

Over 20 companies went public on South Korea’s main stock board last year, raising about 17 trillion won, nearly double the previous record of 8.8 trillion won in 2010, showed data from bourse operator Korea Exchange.

Analysts expect even more companies to list in South Korea this year, including startups such as mobility platform company SOCAR and online grocery services firm Kurly Inc.

($1 = 1,201.7400 won)

(Reporting by Heekyong Yang and Jihoon Lee; Editing by Miyoung Kim and Christopher Cushing)