Tokyo Metro to go public as Japan seeks to reap benefits of soaring stock market

Tokyo Metro, which operates most of the Japanese capital’s subway system, is planning to go public in the next financial year — a major privatization effort by Japan as it seeks to take advantage of a buoyant stock market that has shot to 34-year peaks.

The company, which is 53.4% owned by the national government with the rest held by the Tokyo Metropolitan Government, will be listed in the year that begins in April.

Half the company is set to be sold with each government planning to sell half their stakes, according to a 2022 government document that laid out plans for the offering.

The Tokyo government has set aside ¥3.57 billion ($24.2 million) for costs related to the sales of shares in the upcoming financial year’s budget, according to a document released Friday.

That budget is earmarked for underwriting fees, a Tokyo government official said.

“We’ll be discussing the specifics with the relevant parties in the future,” Tokyo Gov. Yuriko Koike told reporters, declining to comment on the timing of the listing.

The central government plans to use the proceeds from its portion of the sale to fund recovery efforts from the 2011 Fukushima earthquake.

The railway company, which carries 5.95 million passengers each day on average over a 195-kilometer network of tracks, posted net profit of ¥24.2 billion in the April-September period on sales of ¥40.4 billion.

The government in 2022 picked five brokerage firms — Nomura, Mizuho and Mitsubishi UFJ Morgan Stanley, Goldman Sachs and Bank of America — to lead the subway’s IPO. It has been delayed due to the COVID-19 pandemic.