Biggest Tokyo IPO Since SoftBank Set to Test Weak Market

(Bloomberg) -- The initial public offering of an online bank is poised to test investor appetite for new shares in Japan, amid a slowdown in listings both locally and globally.

SBI Sumishin Net Bank Ltd. and its holders are seeking to raise over $1 billion in a share sale followed by a March 24 listing. If terms of the deal don’t change, it will be the third IPO in Asia to cross the billion-dollar mark this year and Japan’s largest since SoftBank Corp.’s $21 billion deal in 2018.

It’s a delicate moment for a big offering to hit the market, particularly in Tokyo, where smaller-ticket deals tend to dominate. IPOs have gotten off to a rough start this year from New York to London and Hong Kong amid prospects of interest-rate hikes, geopolitical tensions and increased volatility. 

SBI Sumishin, a joint-venture of SBI Holdings Inc. and Sumitomo Mitsui Trust Bank Ltd., is the first online bank to go public in Japan. Internet giant Rakuten Group Inc. also seeks to list its web-based lending unit in Tokyo later this year. IPOs from the subsector were hot last year, with South Korea’s KakaoBank Corp. and the New York-listing of Brazil’s Nubank climbing in the secondary market.

Only five IPOs have priced in the Japanese capital so far in 2022, with combined proceeds of $36 million. That compares with the seven deals that raised $252 million over the same period last year.

Equity appetite has been weak in general, with the benchmark Topix down 2.4% this year and MSCI Inc.’s index of global stocks down 4.7%. On the plus side, SBI Sumishin may benefit from investor interest in Japan’s sudden, late embrace of online banking amid the pandemic and a government push for cashless transactions.

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