Government officials in Japan are preparing to list Tokyo Metro in coming weeks in an IPO that is likely to be the country’s biggest in years.
National and city officials want a 700-billion-yen ($4.7 billion) valuation for the subway operator for its listing, which sources say could occur as soon as late October – just over two months.
The national and Tokyo governments, which own 100% of Tokyo Metro, plan to arrange a meeting of brokerages within a week for a briefing on the IPO and expect to receive approval for the listing from the Tokyo Stock Exchange as soon as mid-September, the sources said.
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With half the company to be sold, the initial public offering (IPO) could raise 350 billion yen at that valuation, which would exceed the size of Kokusai Electric’s IPO last year and be the largest since SoftBank Group listed its wireless unit in 2018.
The Tokyo government said the timing of the sale is being discussed with the national government and is not decided.
The finance ministry did not respond to requests for comment. Tokyo Metro said it would not comment on progress on the listing. Japan Exchange Group, which operates the Tokyo Stock Exchange, said it cannot comment on specific companies.
The IPO follows the listing of other railway operators, including Kyushu Railway (JR Kyushu) in 2016.
Tokyo Metro runs 195 kilometres (120 miles) of lines carrying 6.5 million passengers daily. Its history dates back to 1920 with the establishment of the Tokyo Underground Railway Company.
Seven years later, it opened Japan’s first subway line, between the Asakusa and Ueno districts of Tokyo.
The company, whose business includes real estate and retail, reported net profit jumped by two-thirds to 46 billion yen in the financial year ended March 2024 as economic activity rebounded from the Covid-19 pandemic.
The central government, which owns 53.4% of Tokyo Metro, plans to use the funds raised to repay reconstruction bonds issued following the 2011 earthquake and tsunami. The Tokyo government holds the remaining 46.6% of the subway operator.
Nomura, Mizuho and Goldman Sachs are the joint global coordinators for the listing.
- Reuters with additional editing by Jim Pollard
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