In a closely watched market debut, Tokyo Metro Co. shares soared on Wednesday, highlighting strong retail investor appetite for Japan’s transportation sector. The stock closed at 1,739 yen ($11.45), well above its initial public offering price of 1,200 yen ($7.90).
The IPO, which raised 348.6 billion yen ($2.3 billion), marks Japan’s largest public offering since SoftBank’s telecom unit listing in 2018. The central and Tokyo governments each sold half of their holdings, retaining equal stakes in Asia’s oldest subway operator.
While investors were drawn to the company’s stable earnings and projected 3.3% dividend yield, analysts remain cautious about its growth prospects. NLI Research Institute’s chief equity strategist noted that the stock might face selling pressure once initial enthusiasm wanes.
Tokyo Metro, which operates nine subway lines and serves 1.9 billion passengers annually, relies heavily on its railway business for 90% of sales. The company’s president defended its growth strategy, citing expected population growth in central Tokyo through 2035 and ongoing development projects.
The government plans to use proceeds from the share sale to repay bonds issued for reconstruction following the 2011 earthquake and tsunami.
