TOKYO (Reuters) – Tokyo Metro shares soared 45% in their market debut on Wednesday after raising $2.3 billion in Japan’s biggest initial public offering in six years.
Tokyo Metro, one of the capital’s two largest subway operators, was trading at 1,730 yen ($11.41) in the morning after opening untraded due to excessive buying orders.
The company set its IPO price at 1,200 yen per share, the highest of the target range, and raised 348.6 billion yen. The IPO was more than 15 times oversubscribed, with investors drawn to the well-known name with an attractive dividend yield.
Toshio Morita, representative director of the Japan Securities Dealers Association and former president of Nomura Securities, said before his debut that “Listing large companies that are familiar to individual investors has the great benefit of broadening the base of investors.”
Tokyo Metro is forecasting a dividend of 40 yen per share for the fiscal year ending March 2025, and is appealing to investors with perks such as toppings from the noodle shops it operates.
The company’s history dates back to 1920, when the Tokyo Underground Railway Company was established. Seven years later, Japan’s first subway opened between Tokyo’s Asakusa and Ueno districts.
It operates a 195-kilometer (120-mile) line and carries 6.5 million passengers each day.
The company’s IPO will be the largest in Japan since SoftBank Group listed its communications division at the end of 2018.
Rigaku Holdings, a maker of X-ray inspection tools, is set to raise $863 million in an IPO and debut on Friday after setting its stock price at the high end of a range.
There have been $4.9 billion worth of IPOs in Japan since the beginning of the year, the largest amount in six years, according to LSEG data.
Benchmark indices were flat. Year-to-date, it’s up 15%.
(1 dollar = 151.6400 yen)
(Reporting by Sam Naschy, Miho Uranaka; Editing by Christopher Cushing)
