Japan's Largest IPO in 6 Years 'Tokyo Metro' Surges 45% on First Day

Tokyo Metro, the operator of the subway in Japan, made a successful debut by closing with a 45% surge on its first day listed on the Tokyo Stock Exchange. At one point during the trading session, the price soared up to 47%.

According to Nihon Keizai Shimbun (Nikkei) and others, on the 23rd, Tokyo Metro was listed on the Tokyo Stock Exchange Prime (top-tier) market and closed at 1,739 yen per share. This is about a 45% increase compared to the pre-listing public offering price of 1,200 yen.

[Image source=Reuters Yonhap News]

Tokyo Metro’s opening price was 1,630 yen, and during the session, it surged to as high as 1,768 yen. This is approximately 47% higher than the public offering price. As a result, the market capitalization exceeded 1 trillion yen.

Tokyo Metro operates nine subway lines in the Tokyo metropolitan area and was noted as the largest IPO in six years since SoftBank’s listing in 2018. Due to strong investor demand, it was oversubscribed more than 15 times.

The market views the high dividend yield and profit growth as factors that make Tokyo Metro’s stock attractive. Due to the nature of its business concentrated in urban areas, it is less affected by population decline. Taku Ito, Chief Equity Fund Manager at Nisei Asset Management, told Bloomberg News, “Tokyo Metro is a typical dividend stock and a defensive stock. While the stock price is unlikely to rise significantly, it is a stock that can be held for a long time at the current level.”

This listing is in accordance with the Reconstruction Funding Securing Act, which stipulates that the Japanese government (53.45%) and the Tokyo Metropolitan Government (46.6%) sell half of their shares in the company by 2027, using the proceeds to repay bonds issued for reconstruction after the Great East Japan Earthquake.

This content was produced with the assistance of AI translation services.