In Japan's largest initial public offering in six years, Tokyo Metro raised 348.6 billion yen ($2.3 billion) after pricing its shares at 1,200 yen per share, according to the company's regulatory filing on Tuesday.
Miho Oranaka | Reuters
A Tokyo Metro IPO could drive momentum in the Japanese market and attract more companies to the country, as China continues to lose ground, analysts said.
In Japan's largest initial public offering in six years, Tokyo Metro raised 348.6 billion yen ($2.3 billion) after pricing its shares at 1,200 yen per share, according to the company's regulatory filing on Tuesday.
Reuters, citing two sources familiar with the matter, reported that the initial public offering was oversubscribed 15 times. The stock is expected to be listed on the Tokyo Stock Exchange on October 23.
“Everyone knows it, and it's been priced relatively cheap,” LightStream Research founder Mio Kato told CNBC's “Street Signs Asia” on Tuesday. “I think the Tokyo government as well as the Ministry of Finance, obviously, don't want the IPO to fail.”
“It's a very big IPO of the year, and it's just something that everyone, you know, the entire public, will be focused on getting very close to the election,” Kato added. “We think they offer very, very good value.”
A recent report published by Dealogic, a financial markets platform, shows that in September, the value of capital market issuances in the Asia-Pacific region amounted to just $168 billion, 15% lower than in the first nine months of 2023 and 27% lower than in the same period of Year 2022.
The decline in total issuances in the Asia-Pacific region coincided with the slowdown in China, according to the report. She added that India and Japan made up for the lack of releases in China.
Kato said he believes the positive trend will continue for Japan, suggesting the country will soon recover from years of weak IPO activity.
“I saw some news about Nasdaq actually trying to attract more Japanese IPOs. And since then, you know, the Chinese IPO market has been kind of quiet recently,” he said.
Hyundai India also began taking applications for its $3.3 billion IPO in Mumbai this week, in a deal set to become the country's largest listing.
Both Hyundai India and Tokyo Metro are in “very hot positions” and “highly liquid,” Ringo Choi, head of IPOs for Asia-Pacific at EY, told CNBC's “Squawk Box Asia” on Tuesday.
Choi predicted that these two IPOs will be groundbreaking for their respective markets.
When asked if he thought the listing of Tokyo Metro and Hyundai India would open the door to more activity, he said: “I do.”
“I think after these two IPOs, if the return of IPOs is reasonably good, it will attract more companies to look at these two markets as an IPO destination,” Choi said.
— CNBC's Dylan Potts contributed to this report.
