15 october 2024 : Tokyo Metro Co. is set to raise ¥348.6 billion ($2.3 billion) after pricing its shares at the upper end of the expected range, reflecting strong demand for Japan’s largest IPO in six years.
The subway operator has priced its shares at ¥1,200 each, according to sources who requested anonymity to discuss confidential details. The shares were marketed within a range of ¥1,100 to ¥1,200. The company plans to list its shares in Tokyo on October 23.
A spokesperson for Tokyo Metro declined to provide any comments.
This IPO marks Japan’s largest since SoftBank Corp. raised $21 billion in December 2018, based on data from Bloomberg. With Tokyo Metro’s listing and other upcoming deals, total IPO proceeds in Japan this year could rise from the current $1.6 billion towards the $4.4 billion raised throughout 2023.
Katsumi Udagawa from Ichiyoshi Securities Co.’s Investment Information Department noted that if the current momentum continues, it could revitalize the market, paving the way for more large-scale IPOs following Tokyo Metro’s.
The deal has attracted significant interest from global investors, with long-only funds fully covering the IPO’s international order book, as reported by Bloomberg News last week. Additionally, the domestic portion, which constitutes 80% of the offering, has also been fully covered, according to insiders.
Investors are drawn to the attractive dividends and perceive a sense of security in the company’s performance, with Takamasa Ikeda, a senior portfolio manager at GCI Asset Management, stating that “the stock can be bought like a bond.”
Founded in 2004, Tokyo Metro operates nine train lines and serves approximately 6.52 million passengers daily. The Japanese government holds a 53.42% stake in the company, while the Tokyo Metropolitan government owns the remaining 46.58%. Their combined ownership will be halved following the IPO.
