Tokyo Metro set to raise US$2.3 billion in Japan's biggest IPO in 6 years, sources say

TOKYO: Tokyo Metro is expected to raise ¥348.6 billion (US$2.3 billion) after pricing its initial public offering at the top end of its range, according to two sources familiar with the matter, in the largest IPO in Japan for six years.

The company has priced the shares at 1,200 yen apiece, compared to a range of 1,100 to 1,200 yen, said the sources, who declined to be named as the information is not public.

Tokyo Metro declined to comment.

One of Tokyo's two major subway operators, the company is set to announce the pricing later on Tuesday and list on the Tokyo Stock Exchange on Oct 23.

The price gives Tokyo Metro a dividend yield of 3.3 per cent 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 central government, which owns 53.4 per cent of Tokyo Metro, and the Tokyo government, which holds the remaining 46.6 per cent, are selling half of their shares in the IPO.