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Japan Post IPO expected to raise 7 5 billion

Article By: ,  Financial Analyst
September 10, 2015 6:37 PM

Japan Post Holdings has received the go-ahead from the Tokyo Stock Exchange to go public in November.

The listing – which will also include its bank and insurance units – will seek to raise a combined 1.4 trillion yen (£7.5 billion) in an IPO that marks Japan's biggest privatisation in nearly three decades, according to Reuters.

"The IPO is an important step in privatisation and the shares in the three group companies are an important asset of the Japanese people," said chief cabinet secretary Yoshihide Suga. The sale "will be a trigger to speed up the move from savings to investment and will help progress toward a virtuous cycle in the economy."

The three companies will have a combined market value of 13.7 trillion yen when they are listed on November 4th, according to a filing posted to the Ministry of Finance today (September 10th).

Net income down 23 per cent

Japan Post Bank will have indicative price of 1,400 yen and have the largest market capitalisation of the three at 6.3 trillion yen. The post and the insurers would have a value of 6.1 trillion yen and 1.3 trillion yen respectively.

The postal group said it expects net income to decline 23 per cent to 370 billion yen in the year ending on March 31st.

The bank unit forecasts annual net profit to fall 13 per cent while the insurance unit said net income is likely to gain three per cent.

Around 80 per cent of the three firm's IPO allocation will go to domestic investors. A finance ministry official quoted by Bloomberg noted that 95 per cent of the domestic offering will be sold to individuals while all of the overseas portion will go to institutional investors.

Japan Post employs more than 200,000 staff in 24,000 offices and branches nationwide. Its banking unit has about 178 trillion yen in deposits.

The government has privatised several state-owned companies in recent years, including a state railway, telephone company and cigarette maker.

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