Japan’s national and Tokyo governments are eyeing a 700 billion yen ($4.7 billion) valuation for Tokyo Metro as they prepare to list the subway operator by the end of October, according to three sources. This would be the largest initial public offering (IPO) in Japan in nearly six years.
The governments, which jointly own 100% of Tokyo Metro, plan to hold a meeting with brokerage firms within the next week to discuss the IPO. They expect to secure approval from the Tokyo Stock Exchange by mid-September. If the listing proceeds as planned, with half of the company being sold, the IPO could raise around 350 billion yen, surpassing last year’s Kokusai Electric IPO and becoming the biggest since SoftBank Group listed its wireless unit in 2018.
While the Tokyo government stated that the timing of the sale is still under discussion with the national government, no final decision has been made. Tokyo Metro and the Japan Exchange Group, which operates the Tokyo Stock Exchange, declined to comment on the listing’s progress.
Tokyo Metro, with a history dating back to 1920, operates 195 kilometers of subway lines that serve 6.5 million passengers daily. The company reported a significant jump in net profit to 46 billion yen for the financial year ending March 2024, as Japan’s economy rebounded from the COVID-19 pandemic. Proceeds from the central government’s 53.4% share of Tokyo Metro will be used to repay reconstruction bonds issued after the 2011 earthquake and tsunami. The remaining 46.6% is owned by the Tokyo government. Nomura, Mizuho, and Goldman Sachs are the joint global coordinators for the IPO.