The Japanese government is aiming for a substantial valuation of JPY700bn (about $4.7bn) for the Tokyo Metro as preparations for its initial public offering (IPO) ramp up. This move could position Tokyo Metro’s listing as the largest IPO in Japan in nearly six years, with plans to launch as early as late October, according to multiple sources familiar with the matter, Reuters reports.

The listing, which would involve selling 50% of Tokyo Metro’s shares, could raise approximately JPY350bn, surpassing the previous record set by Kokusai Electric’s IPO last year and challenging the scale of SoftBank Group's wireless unit offering in 2018. The Tokyo and national governments, which currently hold a combined 100% stake in Tokyo Metro, are coordinating the final details of the sale and expect to secure approval from the Tokyo Stock Exchange by mid-September.

Tokyo Metro, with its expansive network and a daily passenger count of 6.5mn, has been a cornerstone of Japan's public transportation system since its inception in 1920. The company's operations extend beyond transport, including substantial investments in real estate and retail. Recent financial reports indicate a robust recovery from the pandemic, with net profit soaring by two-thirds to JPY46bn for the financial year ending March 2024.

The IPO follows a trend of railway operators going public, such as Kyushu Railway's listing in 2016. The proceeds from Tokyo Metro's offering are expected to be used by the central government to repay reconstruction bonds issued in the wake of the 2011 earthquake and tsunami. The Tokyo government retains a 46.6% share of the company, while the central government holds 53.4%.

Nomura, Mizuho, and Goldman Sachs are leading the global coordination for this major listing. However, both Tokyo Metro and the Japan Exchange Group, which oversees the Tokyo Stock Exchange, have declined to comment on specific details regarding the IPO at this time.

As Japan’s largest IPO in recent years, the Tokyo Metro listing is set to capture significant attention from both domestic and international investors, reflecting the country's ongoing economic recovery and market appeal.