Tokyo Metro is the largest Japanese IPO since SoftBank Group listed its telecom company at the end of 2018
Tokyo Metro is expected to raise 348.6 billion yen ($2.3 billion) after valuing its IPO at the top of its range, according to two sources familiar with the matter, in Japan’s biggest initial public offering in six years.
The IPO was more than 15 times oversubscribed, the sources said, with the company’s dividend yield seen as an attractive proposition by many, including retail investors attracted to a household name.
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The company has priced the shares at 1,200 yen each, compared with a range of 1,100 to 1,200 yen, according to the sources, who declined to be named because the information is not public.
The portion available to private investors, which accounted for almost four-fifths of the total, was about ten times oversubscribed, the sources said.
The shares available to domestic and foreign institutional investors, accounting for 1.5 percent and 20 percent respectively, were oversubscribed by more than 20 and 30 times, the sources said.
Tokyo Metro declined to comment.
The company, one of the two largest subway companies in Tokyo, will announce prices later on Tuesday and list on the Tokyo Stock Exchange on October 23.
The price gives Tokyo Metro a dividend yield of 3.3 percent, based on the forecast dividend of 40 yen per share for the fiscal year ending March 2025.
“That stands out compared to other private and JR railways,” said Kazumi Tanaka, analyst at DZH Financial Research.
“In addition to the stability of the rail sector, we can expect growth from increasing inbound traffic,” he added.
The central government, which owns 53.4 percent of Tokyo Metro, and the Tokyo government, which holds the remaining 46.6 percent, will sell half of their shares in the IPO.
Tokyo Metro, the largest IPO in Japan since SoftBank Group floated its telecom unit in late 2018, will be joined by Rigaku, a Carlyle Group-backed maker of X-ray testing tools, which is also planning an IPO in October.
Bain Capital this month scrapped a plan for an initial public offering of chipmaker Kioxia after investors insisted on a lower valuation than the acquisition company was targeting, Reuters reports.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
First publication: October 15, 2024 | 9:08 am IST