The initial public offering (IPO) of Tokyo Metro Co., one of two subway operators based in Japan’s capital, is seeking to raise around JPY319.6 billion ($2.81 billion), giving a big boost to the country’s market for new listings.
The company’s IPO would be the biggest in Japan since SoftBank Corp.’s US$21 billion listing in December 2018, according to data compiled by Bloomberg. Tokyo Metro, whose IPO could value it at about JPY639.1 billion, plans to list on the Tokyo Stock Exchange on Oct. 23, it said in a filing to Japan’s Ministry of Finance on Friday.
The offering is for 290.5 million shares at an indicative price of JPY1,100 each. Tokyo Metro expects to set the IPO’s price range on Oct. 7, and to price the shares Oct. 15. The domestic tranche of the offering makes up 80% of the deal, while the rest will go international investors.
Tokyo Metro forecasts a dividend of JPY40 per share for the fiscal year ending March 2025, implying an yield of 3.6% based on the indicative price.
The dividend yield looks “relatively high,” said Mitsushige Akino, president of Ichiyoshi Asset Management. “It’s not a stock that grows rapidly, but it’s expected to have a certain degree of stable business performance, regardless of the economic climate.”
The Ministry of Finance now holds about 53.42% of the shares and the Tokyo Metropolitan Government the remaining 46.58%. Legislation requires the national government to sell shares in Tokyo Metro by March 2028 to repay debt sold in the aftermath of the 2011 quake and tsunami.
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The filing comes as share sales by Japanese companies reach the most in two decades, despite recent volatility that sent benchmark equity gauges into a bear market. Chipmaker Kioxia Holdings Corp. has filed for an October IPO, the Nikkei reported last month.
IPOs in Japan have raised US$1.5 billion this year through Sept. 20, Bloomberg-compiled data show. Tokyo Metro’s listing, combined with other deals, could lift that figure closer to the US$4.4 billion raised in all of 2023.
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Also on Friday, Carlyle Group-backed scientific-instruments company Rigaku Holdings Corp. said it was looking to list shares in Tokyo on Oct. 25, in a deal that seeks to raise JPY109.6 billion, according to a filing to the Ministry of Finance.
Tokyo Metro, which was established in 2004, operates nine train lines and carries on average about 6.52 million passengers per day.
Nomura Securities Co., Mizuho Securities Co. and Goldman Sachs Japan Co. are joint global coordinators for Tokyo Metro’s IPO.
