Tokyo Metro has raised ?348.6 billion ($2.3 billion) in Japan¡¯s largest initial public offering in six years after pricing its shares at the top of its provisional range, a regulatory filing from the company showed on Tuesday.
The IPO was more than 15 times oversubscribed, said two sources familiar with the matter, as many investors were drawn by a household name and the firm¡¯s attractive dividend yield.
The company priced the shares at ?1,200 apiece, compared with a provisional range of ?1,100 to ?1,200. It is expected to list on the Tokyo Stock Exchange on Oct. 23.
The proportion available to retail investors, accounting for almost four-fifths of the total, was around 10 times oversubscribed, the sources said.
The shares available to domestic and foreign institutional investors, accounting for 1.5% and 20% respectively, were more than 20 and 30 times oversubscribed, the sources said.
Tokyo Metro declined to comment.
The price gives Tokyo Metro a dividend yield of 3.3% based on its forecast dividend of ?40 per share for the financial year ending March 2025.
¡°That stands out compared to other private and JR railways,¡± Kazumi Tanaka, an analyst at DZH Financial Research, said, referring to Japan Railway by its abbreviation.
¡°In addition to the stability of the railway business, we can expect growth from increased inbound traffic,¡± he added.
The dividend yield at Kyushu Railway, which listed in 2016, is 2.2%.
Tokyo Metro, one of the capital¡¯s two major subway operators, operates nine subway lines and carried an average 6.5 million passengers daily during the last fiscal year.
The company¡¯s business includes real estate and retail, and its operating income rose by 175% to ?76 billion in the financial year ended March.
The central government, which owns 53.4% of Tokyo Metro, and the Tokyo Metropolitan Government, which holds the remaining 46.6%, are selling half of their shares in the IPO.
Tokyo Metro is the largest Japan IPO since SoftBank Group listed its telecoms unit in late 2018.
Rigaku, a Carlyle Group-backed maker of X-ray testing tools, is also planning an IPO in this month, with pricing to be disclosed on Thursday.
Bain Capital has scrapped a plan for an IPO of chipmaker Kioxia this month after investors pushed for a lower valuation than the buyout firm was targeting.
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