South Korean listed companies face delisting risks as market cap standards tighten

Following the recent tightening of delisting requirements, 7.4% of South Korean listed companies failed to meet the minimum market capitalization standards as of July. According to analysis by Leaders Index, 192 companies out of 2,578 total listed firms fell below the current thresholds, which require a market cap of 30 billion won for KOSPI and 20 billion won for KOSDAQ.

On the KOSDAQ market, 152 companies (8.7%) failed to meet the 20 billion won requirement, while 40 KOSPI companies (4.8%) fell below the 30 billion won mark. Additionally, 200 companies, or 7.8% of all listed firms, are classified as ‘penny stocks’ with average closing prices below 1,000 won, posing further delisting risks under new price-based regulations.

The situation is expected to intensify next year when market capitalization thresholds are scheduled to rise further to 50 billion won for KOSPI and 30 billion won for KOSDAQ. If these new standards are applied to current July averages, approximately 18.6% of all listed companies (479 firms) would fail to meet the criteria. Notably, over 21% of KOSDAQ-listed companies would be at risk of delisting under those projected requirements.