Tokyo Metro shares surged 44 percent
TOKYO: With promises of substantial payouts, Tokyo Metro’s shares jumped 44% in their market debut on Wednesday after securing $2.3 billion in Japan’s biggest IPO in six years.
At the noon trading break, the stock price was 1,722 yen ($11.35), which gave Tokyo Metro, one of the two main subway operators in the city, a value of around 1 trillion yen.
In an initial public offering (IPO) that was over 15 times oversubscribed and priced at the upper end of an indicative range of 1,200 yen each, the business raised 348.6 billion yen.
Travis Lundy, a special circumstances expert who writes for Smartkarma, said, “It’s a well-known, well-respected, and stable business that offered a decently high dividend yield at the IPO, and excitement around that is reflected in the first day of trading.”
In addition to providing benefits to shareholders like toppings at its noodle restaurants, Tokyo Metro projects a dividend of 40 yen per share for the fiscal year that ends in March 2025.
At 1,722 yen, Tokyo Metro’s dividend yield is a relatively modest 2.3%, which is close to rival Kyushu Railway’s 3.3% yield at the IPO price.
According to Tomoichiro Kubota, a senior market analyst at Matsui Securities, there was a significant surge in the creation of brokerage accounts aimed at the IPO.
The Tokyo Underground Railway Company was founded in 1920, marking the beginning of the company’s history. It launched Japan’s first subway line between Tokyo’s Asakusa and Ueno neighborhoods seven years later.
Tokyo Metro operates 6.5 million passengers per day over 195 kilometers (120 miles) of lines, and it also engages in retail and real estate.
“The listing of a large company that individual investors are familiar with has a large merit in broadening the investor base,” Toshio Morita, the former president of Nomura Securities and CEO of the Japan Securities Dealers Association, said before the debut.
Since SoftBank Group listed its telecom division in late 2018, this was Japan’s biggest initial public offering (IPO).
After pricing shares at the top of the range, X-ray diagnostic instrument manufacturer Rigaku Holdings garnered $863 million in its initial public offering (IPO), which is scheduled to launch on Friday.
According to LSEG statistics, Japan has seen $4.9 billion in initial public offerings (IPOs) so far this year, the most in six years.
After a sudden increase in interest rates and a change in the prime minister, the stock market has been erratic.
After investors argued for a lower value than the buyout company was aiming for, Bain Capital abandoned its October IPO plan of chipmaker Kioxia, according to Reuters.
On Wednesday, the benchmark index remained unchanged. It has increased by 15% so far this year.
