Tokyo Metro experiences a 40% increase in share price on its debut following Japan's largest IPO in six years.

• The IPO was more than 15 times oversubscribed, with retail investors having a portion that was 10 times oversubscribed, according to Reuters.
• The IPO sold 2.32 billion shares at 1,200 yen each, resulting in a valuation of 348.6 billion yen ($2.3 billion).

Tokyo Metro's shares surged more than 40% during its initial public offering (IPO) on Wednesday.

In Japan's largest IPO in six years, the company raised $2.3 billion. The shares were priced at the top end of the IPO price range of 1,100 yen to 1,200 yen.

Tokyo Metro is a prominent subway company in Japan and the largest operator in Tokyo. The company is jointly owned by the national and metropolitan governments, with a 53.4% and 46.6% stake respectively.

The IPO was oversubscribed more than 15 times overall, with retail investors' portion, which made up almost four-fifths of the overall size, being oversubscribed around 10 times.

Reuters reported that the shares available to domestic and foreign institutional investors, accounting for 1.5% and 20% respectively, were oversubscribed more than 20 and 30 times.

Jesper Koll, an expert director at Monex Group's financial services firm in Tokyo, stated that the IPO was well-received because Tokyo Metro is a "high dividend, stable cash flow generator" with a very low operational risk.

"Regardless of whether you are a retail investor like Mr. Watanabe or an institutional investor or a global investor, this share is an excellent investment opportunity."

Last week, on CNBC's "Street Signs Asia," Mio Kato, founder of LightStream Research, stated that the stock has been undervalued, calling it a "standout IPO of the year."

In 2024, Japan's stock market has experienced significant growth, with the Nikkei 225 reaching new all-time highs and achieving year-to-date gains of 16.41%.