(Oct 7): Tokyo Metro Co announced a provisional price range for its initial public offering (IPO) that’s projected to be Japan’s biggest in six years.

The price range of ¥1,100 to ¥1,200 compares with its indicative price of ¥1,100 per share declared earlier, and values the subway operator at between ¥639.1 billion (US$4.3 billion or RM18.4 billion) and ¥697.2 billion.

The company, one of two subway operators based in Japan’s capital, is seeking to raise at least ¥319.6 billion at a time when the nation’s equity market is showing signs of recovery. The deal would be the biggest since SoftBank Corp’s US$21 billion listing in December 2018, and could raise as much as ¥348.6 billion.  

Activity in the nation’s equity capital market is picking up, with management buyouts also on the rise, as benchmark share indices climb rebound from an August tumble.

“We have seen a higher level of mergers and acquisitions and management buyouts in the Japanese market over the past year, and so it is good to see large new listings,”said Zuhair Khan, a portfolio manager at UBP Investments Co. “I believe the breadth of listings across different sectors is one of the positive characteristics of the Japanese stock market. It gives investors lots of choice.”

The Topix and Nikkei 225 share benchmarks have both rebounded more than 20% from levels they sank to during the Aug 5 rout. A renewed slide in the yen is supporting exporters, but the indices remain below record levels reached earlier this year.

The offering for 290.5 million shares is scheduled to price on Oct 15, and is expected to begin trading on the Tokyo Stock Exchange Prime market on Oct 23.

Tokyo Metro was set up in 2004, and operates nine subway lines in the world’s most populated metropolitan area. It serves an estimated 6.52 million passengers per day. Japan’s government owns 53.42% of the company, while the Tokyo Metropolitan government owns the remaining 46.58%. Their combined shareholding will halve following the offering. 

Uploaded by Tham Yek Lee