PHOTO
TOKYO - Tokyo Metro raised 348.6 billion yen ($2.3 billion) in Japan's largest initial public offering in six years after pricing its IPO at the top of its 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 yen apiece, compared with a range of 1,100 to 1,200 yen. It is expected to list on the Tokyo Stock Exchange on Oct. 23.
The portion 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 yen per share for the financial year ending March 2025.
"That stands out compared to other private and JR railways," said Kazumi Tanaka, an analyst at DZH Financial Research.
"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 (JR Kyushu), 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 175% to 76 billion yen in the financial year ended 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 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 October 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, Reuters has reported.
($1 = 149.7900 yen)
(Reporting by Miho Uranaka, Sam Nussey and Mariko Katsumura; Editing by Muralikumar Anantharaman and Shri Navaratnam)