Shares of Tokyo Metro, one of Japan’s leading subway operators, skyrocketed by 45% on their market debut, following the country’s largest initial public offering (IPO) in six years. The IPO, which raised 348.6 billion yen ($2.3 billion), was priced at the top of the indicative range at 1,200 yen per share. Demand was intense, with shares oversubscribed by more than 15 times, especially among institutional investors.
Tokyo Metro’s stock opened at 1,739 yen ($11.43), significantly above the IPO price, giving the company a valuation of approximately 1 trillion yen. The robust first-day performance marked the strongest debut for a large Japanese IPO since Mercari’s 77% rise in 2018.
Attractive dividend prospects were a major draw for investors. The company projects a dividend of 40 yen per share for the financial year ending March 2025, resulting in a yield of 3.3% at the IPO price, though this dropped to 2.3% as shares surged. Tokyo Metro also offers shareholder perks, including museum tickets and discounts at its eateries.
The listing reduces the combined government ownership (Japan’s national government and Tokyo metropolitan government) to around 50%. Tokyo Metro, which operates 195 kilometers of subway lines and transports 6.5 million passengers daily, is considered a stable and profitable business. It posted a net profit of 46 billion yen for the fiscal year ending March 2024, with plans to increase it to 52 billion yen in 2025.
Tokyo Metro operates one of the busiest subway systems in the world, with additional ventures in real estate and retail.
