Perks, including access to the company golf range and free tempura, are reportedly luring retail investors to Japan's biggest initial public offering in six years.
Japanese citizens are anticipating a public offering from Tokyo Metro Co., a sprawling underground railway system that carries over 6.5 million passengers daily.
Tokyo Metro's public listing, scheduled for Wednesday, is Japan's biggest IPO since 2018, with the national and Tokyo metropolitan governments raising ¥348.6 billion (US $2.3 billion) by selling 50% of their total stake.
According to Reuters, the stock is already 15 times oversubscribed. The metro reportedly reached this feat with gifts or other perks ranging from train tickets to free tempura at its noodle restaurants and entry to the company's golf range.
To be eligible for any perks an investor must buy a minimum of shares. For example, to access free tempura toppings on bowls of noodles an investor had to buy 200 shares, while a six-month unlimited travel pass goes for 10,000 shares.
But it's not just the perks that are attracting investors; it's the dividend yield.
"The company might have slow capital growth, but it's a very, very safe investment," Francisco Betancourt, a French retail investor told Bloomberg. Betancourt plans to buy shares in the metro, noting Tokyo is one of the few Japanese cities with a growing population.
Fumiaki Totsuka, another investor, has registered for 2,000 shares in the metro's presale lottery.
"I didn't even calculate details like the dividend yield, I just saw the perks and immediately decided to buy," Totsuka told Bloomberg.
Retail investors are a growing force in Japan's equity market, due to a tax-free investment account program that received an influx of cash in January from the government.
According to data from the Bank of Japan at least ¥7.5 trillion went into shares from the Nippon Individual Savings Account (NISA) accounts during the first six months of 2024, increasing the amount by four times since 2023.
While perks lured in investors, it all boiled down to the product itself. The metro is renowned for its efficiency, ease of use and maintenance, according to a survey in Time Out Tokyo.
According to Bloomberg, throughout Japan, similar sentiments are shared about it. The metro is known for its well-mannered staff. While its cars are reputed for their cleanliness, punctuality and orderliness, even at peak times.
Others have growing concerns about the IPO, such as the country's focus on shareholder returns might undercut quality.
The 100-year-old company operates nine lines and 180 stations that connect Tsukiji's famous fish market to Shibuya's vibrant shopping district with the government offices of Kasumigaseki.
The national government plans to use its share of the proceeds to rebuild areas damaged by the earthquake and tsunami off Fukushima in 2011.
