Walkways with subway line signs in Tokyo subway stations.
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The IPO of Japanese subway operator Tokyo Metro performed well, with its shares rising nearly 45% on Wednesday.
The company raised 348.6 billion yen ($2.3 billion) last year largest initial public offering Six years later in Japan. Stocks are priced at the top The IPO price range is 1,100 yen to 1,200 yen.
Tokyo Metro is one of Japan’s leading subway companies and the largest operator in Tokyo. The company is currently jointly owned by the Japanese national government and the Tokyo Metropolitan Government, which hold 53.4% and 46.6% of the shares respectively.
Reuters reported that the overall IPO was oversubscribed by more than 15 times, while the portion available to retail investors (almost four-fifths of the overall size) was oversubscribed by about 10 times.
Reuters reported that domestic and foreign institutional investors could subscribe for 1.5% and 20% of the shares respectively, with oversubscription exceeding 20 times and 30 times.
Jesper Koll, expert director at Tokyo-based Japan’s Monex Group financial services firm, said the IPO was warmly welcomed as the company is a “cash cow”. He added that Tokyo Metro is a “high dividend, stable cash flow generator” and that the company’s operating risk is very low.
“So whether you are Mr. Watanabe (a retail investor) … whether you are a global investor or an institutional investor, this is a stock worth owning.”
Cole also noted that Tokyo Metro’s dividend outlook is “very stable” and may even see a little upside.
He added that this is because demand for subway services in the Japanese capital remains very strong and Tokyo’s population is growing by nearly 1% annually.
LightStream Research founder Mio Kato told CNBC’s “Street Signs Asia” last week that the stock was priced “relatively cheap” and described it as “a big IPO this year.”
Japanese stocks have soared in 2023, with the country being Asia’s best-performing market last year, rising more than 28%. In 2024, the country’s stock benchmark Nikkei 225 hit a record high, with a year-to-date gain of 16.41%.
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