Japan Prepares for Major IPO of Tokyo Metro Valued at $4.7 Billion

Japan's national and Tokyo governments are gearing up for the initial public offering (IPO) of Tokyo Metro, targeting a valuation of 700 billion yen ($4.7 billion). This move, anticipated to take place by the end of October, would mark the largest IPO in Japan in nearly six years. The governments, which collectively own 100% of the subway operator, are expected to convene a meeting with brokerages soon to discuss the IPO details and are seeking approval from the Tokyo Stock Exchange by mid-September. The planned IPO involves selling half of Tokyo Metro, potentially raising 350 billion yen, surpassing the previous year's Kokusai Electric IPO and becoming the largest since SoftBank Group's wireless unit listing in 2018. While the Tokyo government is in discussions with the national government regarding the timing of the sale, no final decision has been made. Tokyo Metro has refrained from commenting on the IPO's progress, and the Japan Exchange Group has stated it cannot provide insights on specific companies. Tokyo Metro, which operates 195 kilometers of subway lines and serves 6.5 million passengers daily, has a rich history dating back to 1920. The company reported a significant net profit increase of two-thirds to 46 billion yen for the financial year ending March 2024, attributed to a rebound in economic activity post-COVID-19. The central government plans to utilize the funds raised from the IPO to repay reconstruction bonds issued after the 2011 earthquake and tsunami. Nomura, Mizuho, and Goldman Sachs are acting as joint global coordinators for the listing.