Japan's largest IPO in six years is coming! Tokyo Metro plans to go public in October, raising over $2 billion.

Tokyo Metro Company announced on Friday that it plans to list on the Tokyo Stock Exchange on October 23 with an estimated valuation of about 639.1 billion yen. Tokyo Metro plans to raise approximately 319.6 billion yen (22.4 billion USD) through its initial public offering (IPO), which will significantly boost Japan's new stock market. Tokyo Metro is one of two subway operators in the capital of Japan. Data shows that this transaction will be the largest IPO since SoftBank listed its mobile business subsidiary in December 2018 and raised $21 billion. Tokyo Metro plans to issue 290.5 million shares with an indicative price of 1,100 yen per share. Tokyo Metro expects to determine the IPO price range on October 7 and the stock price on October 15. 80% of the domestic issuance will be reserved for domestic investors, with the remaining portion open to international investors. Tokyo Metro expects a dividend of 40 yen per share for the fiscal year ending in March 2025, resulting in a yield of 3.6% based on the indicative price. Mitsushige Akino, President of Ichiyoshi Asset Management, said the dividend yield appears "relatively high." "It is not a high-growth stock, but regardless of the economic environment, its business performance is expected to be quite stable." The Japanese Ministry of Finance currently holds approximately 53.42% of Tokyo Metro's shares, while the Tokyo Metropolitan Government holds the remaining 46.58%. By law, the Japanese central government is required to sell its stake in Tokyo Metro by March 2028 to repay bonds issued after the 2011 earthquake and tsunami. Despite recent volatility leading to the benchmark stock index entering bear market territory, the number of stock issuances by Japanese companies has reached its highest level in 20 years. Media reports last month indicated that chip manufacturer Kioxia has applied for an IPO in October. Data shows that Japan's IPO financing this year has reached $3.3 billion so far. Tokyo Metro's listing will push this figure above the $4.4 billion for the whole of 2023. Tokyo Metro's listing will boost Japan's IPO market size. Also on Friday, Rigaku Holdings, a scientific instrument company supported by Carlyle, announced it is seeking to list on the Tokyo Stock Exchange on October 25 to raise 109.6 billion yen. Established in 2004, Tokyo Metro operates 9 lines and transports an average of about 6.52 million passengers per day. Nomura Securities, Mizuho Securities, and Goldman Sachs Japan Co., Ltd. are the joint global coordinators for Tokyo Metro's IPO.