Nomura Holdings Inc., the nation’s top manager of initial public offerings in 2013, expects debut share sales will almost double to ¥1 trillion this year as buyout funds recoup investments amid a stock rally.
“Exits from private equity will increase this year,” said Hiroshi Yoshihara, head of the IPO department at the nation’s largest brokerage.
As many as 80 companies in industries such as information technology, manufacturing and solar energy may list, up from 58 in 2013, he said in an interview on Jan. 21.
Japanese stocks are the best performers in the developed world over the past year, giving companies more reason to go public and buyout firms such as Bain Capital LLC and Cerberus Capital Management LP encouragement to choose IPOs to cash in on investments. Overseas demand for Japan equities will prompt firms to market share sales internationally, said Yoshihara.
“We’ll see more global offerings as foreign investors have a strong appetite for Japanese stocks, not just individuals in Japan,” he said. “Funds that have been studying M&A and equity markets to sell their stakes will go for an IPO when the stock market is in good shape.”
Skylark Co., a restaurant operator controlled by Bain Capital, is considering an IPO in Tokyo as early as this year, two sources said last March. The Boston-based firm acquired Skylark in 2011 for ¥160 billion from a group of investors, including Nomura.
Seibu Holdings Inc., part-owned by Cerberus, plans to list on the Tokyo bourse as early as April, three other sources said last week. Seibu operates 50 hotels in Japan and abroad, including the Hawaii Prince Hotel Waikiki, as well as a commuter rail network in the Tokyo metropolitan area.
“The Japanese IPO market will probably exceed ¥1 trillion after a long interval,” Yoshihara, 50, said. Initial share sales last surpassed that amount in 2010, when they totaled ¥1.3 trillion, according to data compiled by Bloomberg.
Last year’s 58 IPOs were valued at ¥571 billion, the data show. There haven’t been more than 80 transactions since 2007. Tokyo-based Nomura arranged 27 sales last year, the most of any firm in Japan, according to the data.
The Topix index of shares climbed 46 percent in the past year as monetary easing and fiscal spending under Prime Minister Shinzo Abe spurred an economic recovery. Nomura jumped 71 percent as the stock rally fueled brokerage commissions and investment banking fees.
Nomura has been the No. 1 stock underwriter in Japan for the past 12 years, according to data compiled by Bloomberg. Fee income from its equity capital markets business climbed 13 percent in the three months that ended Sept. 30 from a year earlier to ¥11 billion, company presentation materials show.
IPOs are set to pick up elsewhere in the Asia-Pacific region this year. Macquarie Group Ltd., Australia’s biggest investment bank, sees the most potential transactions in the country in six years, Hugh Falcon, co-head of equity capital markets, said in a Jan. 20 interview. In China, initial offerings resumed this month after the government lifted a freeze imposed in 2012.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.