Japan Post Group is targeting individual investors for at least 70 percent of its initial public offering on the assumption that the recent global market turmoil will not damp their appetite for stocks, according to people with knowledge of the matter.
The postal and banking giant is seeking to sell more than ¥1 trillion ($8.3 billion) of shares to Japan’s retail investors, the people said, asking not to be named because the information is confidential. The rest of the ¥1.5 trillion offering will target foreign and local institutional investors, the people said.
A large retail offering would fit with Prime Minister Shinzo Abe’s plans to encourage households to invest more of their savings. His government is selling stakes in Japan Post Holdings Co. and its banking and insurance units in the nation’s biggest IPO this century to raise funds for rebuilding following an earthquake and tsunami in 2011.
Nomura Holdings Inc. will underwrite the biggest part of the sale to Japanese individuals, said the people. The other three global coordinators are Goldman Sachs Group Inc., JPMorgan Chase & Co. and Mitsubishi UFJ Morgan Stanley Securities Co.
Individuals’ purchases of equities on the Tokyo Stock Exchange’s first section exceeded sales in August, despite the global stock market rout, while foreign investors sold more shares than they bought, exchange data show.
Japan Post will announce the details of the IPO as soon as Thursday, with a view to listing the holding company and two units on the exchange on Nov. 4, the people said. Postponing the sale, however, remains an option for the Finance Ministry due to the global market volatility, they said. The Nikkei 225 stock average erased this year’s gains on Tuesday before rebounding Wednesday with a 7.7 percent advance, the most since October 2008.
Spokesmen for Japan Post and Nomura declined to comment on the IPO. Finance Ministry officials also declined to comment.
Individual investors will be able to buy minimum stakes in the three Japan Post companies for about ¥500,000 in total, according to the people. That’s about half the annual limit for the Nippon Individual Savings Account tax-free investment program. Brokerages may encourage clients to open NISA accounts to purchase Japan Post shares, the people said.
The amount of shares to be sold and the allocation to individuals are subject to change depending on the book-building and market environment, the people said. Japan Post Holdings will have an estimated market value of about ¥7 trillion after the listing, they said.
The ¥1.5 trillion sale will be the biggest in Japan since NTT Docomo Inc. raised ¥2.1 trillion in an IPO in 1998, according to data compiled by Bloomberg. Nippon Telegraph & Telephone Corp. raised ¥2.3 trillion in an offering at the height of the bubble economy in 1987, the data show.
Nomura, the nation’s largest brokerage, exclusively sold ¥500 billion of shares in Toyota Motor Corp. to individuals in July. The brokerage is receiving ¥22.5 billion in fees from Toyota in the quarter ending Sept. 30.
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