By Heekyong Yang and Jihoon Lee

SEOUL (Reuters) -LG Energy Solution Ltd (LGES) jumped in its trading debut on Thursday after South Korea’s biggest-ever IPO attracted bids worth $13 trillion, making it the country’s second-most valuable company.

LGES shares opened at 597,000 won versus an initial public offering (IPO) price of 300,000 won. But the shares fell as much as 25% in early trading.

LGES has become South Korea’s second most-valuable company after Samsung Electronics Co Ltd with a market valuation reaching over 105.3 trillion won ($87.62 billion), even at the lowest intra-day trading level.

Spun out of LG Chem Ltd, the firm commands more than 20% of the global electric vehicle (EV) battery market. It supplies Tesla Inc, General Motors Co and Volkswagen AG among others.

Its trading debut will set the tone for upcoming IPOs in South Korea as retail investors – known as “ants” – flock to the stock market with liquidity aided by the government’s stimulus policy during the COVID-19 pandemic.

“It is quite tricky to predict LGES’ first-day trading performance, mainly because of the market’s recent volatility caused by various factors such as investor concerns over the Federal Reserve and how quickly it will move,” said Park Jung-hoon, fund manager at HDC Asset Management in Seoul.

More than 4.4 million retail investors bid a record 114 trillion won 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 the IPO, Asia’s largest equity fund raising since China’s Alibaba Group Holding Ltd raised $12.9 billion in its Hong Kong secondary listing in 2019.

Nearly 2,000 foreign and domestic institutional investors lodged bids worth about $12.8 trillion.

More than 20 companies went public on South Korea’s main board last year, raising about 17 trillion won, nearly double the previous record of 8.8 trillion won raised in 2010, according to bourse operator Korea Exchange.

LGES’ market value is dwarfed by the $208 billion of bigger Chinese rival Contemporary Amperex Technology Co Ltd’s (CATL). However, LG Chief Executive Kwon Young-soo has pointed to a 260 trillion won battery order backlog to highlight the company’s growth potential.

Analysts caution LGES will still likely face growing competition as Chinese peers expand into the global market and more automakers seek to develop their own EV battery technologies.

($1 = 1,201.7400 won)

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