By Miho Uranaka and Sam Nussey
TOKYO (Reuters) -Tokyo Metro has raised 348.6 billion yen ($2.3 billion) in Japan’s biggest initial public offering in six years, after valuing its IPO at the highest level, a company regulatory filing showed on Tuesday .
The IPO was more than 15 times oversubscribed, two sources familiar with the matter said, as many investors were attracted by a household name and the company’s attractive dividend yield.
The company priced the shares at 1,200 yen each, compared to a range of 1,100 to 1,200 yen. It is expected to list on the Tokyo Stock Exchange on October 23.
The portion available to private investors, which accounted for almost four-fifths of the total, was about ten times oversubscribed, the sources said.
The shares available to domestic and foreign institutional investors, accounting for 1.5% and 20% respectively, were oversubscribed by more than 20 and 30 times, the sources said.
Tokyo Metro declined to comment.
The price gives Tokyo Metro a dividend yield of 3.3%, based on the expected dividend of 40 yen per share for the fiscal year ending March 2025.
“That stands out compared to other private and JR railways,” said Kazumi Tanaka, analyst at DZH Financial Research.
“In addition to the stability of the rail sector, we can expect growth from increasing inbound traffic,” he added.
The dividend yield at Kyushu Railway (JR Kyushu), which was listed in 2016, is 2.2%.
Tokyo Metro, one of the two largest subway companies in the capital, operates nine subway lines and carried an average of 6.5 million passengers per day in the past fiscal year.
The company’s businesses include real estate and retail, and operating profit rose 175% to 76 billion yen in the fiscal year ended in March.
The central government, which owns 53.4% of Tokyo Metro, and the Tokyo government, which holds the remaining 46.6%, are selling half of their shares in the IPO.
Tokyo Metro is the largest Japanese IPO since SoftBank (TYO:) Group listed its telecom company at the end of 2018.
Rigaku, a Carlyle Group-backed maker of X-ray testing equipment, is also planning an initial public offering in October, with prices to be announced on Thursday. Bain Capital this month scrapped a plan for an initial public offering of chipmaker Kioxia after investors insisted on a lower valuation than the acquisition company was targeting, Reuters reports.
($1 = 149.7900 yen)
