Tokyo Metro's IPO Sees 45% Surge in Market Debut

TOKYO (Reuters) – Tokyo Metro's shares shot up 45% in their market debut on Wednesday, after Japan's largest initial public offering in six years raised $2.3 billion.

Tokyo Metro, one of the capital's two major subway operators, was trading at 1,730 yen ($11.41) in the morning after opening untraded due to a surplus of buy orders.

The company raised 348.6 billion yen after pricing its IPO at the top of an indicative range at 1,200 yen per share. The IPO was oversubscribed more than 15 times, attracting investors to a familiar name with an appealing dividend yield.

Toshio Morita, CEO of the Japan Securities Dealers Association and former president of Nomura Securities, highlighted the advantages of listing a well-known company in diversifying the investor base before the debut.

Tokyo Metro projects a dividend of 40 yen per share for the financial year ending March 2025 and is enticing investors with benefits such as discounts at its noodle restaurants.

The company's history dates back to 1920 with the inception of the Tokyo Underground Railway Company. Seven years later, it inaugurated Japan's first subway line, linking the Asakusa and Ueno districts of Tokyo.

The network operates 195 kilometres (120 miles) of lines and serves 6.5 million passengers daily.

This IPO marks the largest in Japan since SoftBank (TYO:9984) Group listed its telecommunications unit in late 2018.

Meanwhile, Rigaku Holdings, a manufacturer of X-ray testing tools, raised $863 million in its IPO and is set to debut on Friday.

According to LSEG data, Japan has seen $4.9 billion worth of IPOs year-to-date, the highest in six years. The benchmark index remained flat, showing a 15% gain year-to-date.

($1 = 151.6400 yen)