SEOUL -- Shares in the management agency of K-pop sensation BTS were expected to rocket on their stock market debut Thursday, making an instant multi-billionaire of its chairman and boosting the seven band members' own fortunes.
The initial public offering of shares in Big Hit Entertainment saw staggering demand, with the public section oversubscribed no fewer than 607 times and applicants receiving only a tiny fraction of their requests.
The firm's centrepiece asset BTS have risen to global stardom in recent years, cementing their prominence in the world's biggest music market in August with their all-English track "Dynamite" topping the U.S. Billboard Hot 100.
At the IPO price of 135,000 won ($118) per share, Big Hit would have a market capitalization of 4.8 trillion won -- well over $4 billion, and more than Hanjin Kal, the holding company for the conglomerate that includes the South's flag-carrier Korean Air.
Converted to Philippine currency, $4 billion is roughly P194 billion, which can buy 388 million unlimited samgyupsal meals.
Big Hit founder and CEO Bang Si-hyuk is worth $1.4 billion at the IPO price, according to the Bloomberg Billionaires Index, and is retaining a stake of more than 36 percent of the firm.
The flotation also boosts the band members' own wealth -- Bang gave each of them more than 68,000 shares in August, worth around $8 million at the IPO price and totalling 1.4 percent of the company.
Analysts expect the shares to rocket as soon as the market opens.
"Considering all the information about the firm now available, the IPO price could be the lowest price we will ever see," Park Sung-ho of Yuanta Securities told AFP.
Earlier this year, his company estimated Big Hit's enterprise value -- its market capitalisation plus accumulated debt -- at two to three trillion won, he said.
It has since raised it to 10 trillion won after assessing its business models including licensing sales, he added.
But there is one inescapable hurdle looming for the newly listing agency: mandatory military service for all seven boy band members, who made their debut in 2013. South Korea requires all able-bodied men to serve in uniform to defend it against security threats from the nuclear-armed North.
Under the existing conscription laws BTS member Jin -- real name Kim Seok-jin -- aged 27, will have to report for duty by the end of 2021. The other six members, born between 1993 and 1997, will have to follow in the coming years.
South Korea is currently debating exemptions for stars such as BTS, who have been at the forefront of the Korean Wave cultural phenomenon in recent years and are estimated to generate billions for the country's economy.
But no such dispensations have so far been granted to pop stars, and if they are forced to leave the stage it could blow a hole in Big Hit's finances: BTS were responsible for 97 percent of its revenues last year, according to the IPO prospectus.
Big Hit acknowledged their anticipated absence as a "risk factor".
It is looking to expand activities such as "contents licensing sales" that do not require the artists' "direct participation" to try to cushion the blow.
But it acknowledged their time off-camera "could have a negative impact on the company's profitability and growth".