In what is being hailed as the largest initial public offering (IPO) in Japan since 2018, KKR-backed chip equipment maker Kokusai Electric raised $724.4 million. The company priced its shares at 1,840 yen each, the upper limit of their marketed range, leading to a valuation of around $2.8 billion.
The IPO witnessed an oversubscription of more than ten times from foreign investors. If an overallotment option for domestic investors is activated, the potential fundraising could reach up to $833 million. The shares are set to be listed on Tokyo's Prime Market on October 25.
The pricing adjustment from an initial 1,890 yen per share to a range of 1,830-1,840 yen came as a response to institutional investor feedback and current stock market conditions. The disappointing listing performance of Arm also played a role in the adjustment.
Kokusai Electric, known for producing thin film deposition machines essential for chip manufacturing, has attracted significant attention amidst industry discussions concerning AI-influenced chip demand and a slowdown in the electronics market.
Following the IPO, KKR's stake in Kokusai will decrease from 73.2% to 47.7%. Notably, over 40% of Kokusai's revenue is generated by its largest customers—Samsung Electronics, TSMC, and Micron Technology (NASDAQ:MU).
This event marks a milestone in Japan's financial market, as it becomes the largest IPO since SoftBank (TYO:9984) Corp.'s ¥2.4 trillion listing five years ago. The firm put forth 58.8 million shares at the adjusted price band, diverging from the initial guidance provided in September. The significance of this event is underscored by the reduced pricing band, the record previously held by SoftBank, and its impact on Japan's financial market.
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