(Adds closing price, CEO comment)
By Miho Uranaka and David Dolan
TOKYO, April 21 (Reuters) - Japan's Rakuten Bank Ltd saw its share price surge as much as 40% in its market
debut on Friday, reflecting robust demand for the country's
biggest online lender even after it downsized its $625 million
initial public offering (IPO).
The stock ended the trading day at 1,930 yen on the Tokyo
Stock Exchange versus an IPO price of 1,400 yen.
It spent the first hour of its debut untraded due to a flood
of buy orders before rising as high as 1,965 yen, exceeding the
highest proposed IPO price before the deal was scaled back.
Rakuten Bank's IPO was still Japan's biggest in over four
years, albeit muted by both caution about a banking sector
reeling from U.S. bank failures and concern about its exposure
to money-losing e-commerce parent Rakuten Group Inc .
The share sale gives a much-needed cash boost for parent
Rakuten which has seen four years of loss from the costly
build-out and subsequent struggle of its mobile phone network.
Rakuten Bank Chief Executive Hiroyuki Nagai told a news
conference the lender has no need to sell any more new shares,
at least until March 2027 when its mid-term business plan ends.
It also has no plan to pay dividends in the short term
though will review the policy in a few years' time, Nagai said.
The IPO price was "cheap" considering the bank's return on
equity, said analyst Travis Lundy on the Smartkarma platform.
"It still has possibilities for more growth going forward,"
though growth rates in deposits, assets and customers may not be
as fast as in the past few years, Lundy said.
Friday's closing price left the lender valued at around 328
billion yen ($2.45 billion).
Rakuten Bank sold 53.95 million existing shares to domestic
and overseas investors, as well as 5.55 million new shares. It
initially priced them as much as 1,960 yen each.
At the lower price, international demand was so strong that
bankers ultimately increased the portion of the share sale
available to investors abroad, filings showed.
The overseas portion was still more than 15 times
oversubscribed, lead manager Daiwa Securities said.
($1 = 133.7900 yen)
(Reporting by David Dolan and Miho Uranaka; Additional
reporting by Kiyoshi Takenaka; Editing by Himani Sarkar and
Christopher Cushing)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.