Kokusai Electric climbs after Japan’s biggest IPO since 2018

JAPANESE chip equipment maker Kokusai Electric gained in Tokyo on Wednesday (Oct 25) after the largest initial public offering (IPO) in the country since 2018.

Shares jumped as much as 29 per cent to trade at 2,371 yen, compared with the IPO price of 1,840 yen. Kokusai, which supplies chipmaking gear to industry names from Intel, spun out of Hitachi Kokusai Electric after American private equity firm KKR & Co bought the company in a tender offer in 2018. Kokusai competes with larger rival Tokyo Electron in the specialised field of film deposition machines that’s crucial to producing advanced chips.

KKR sold about 58.8 million shares in the company to raise 108 billion yen (S$985.5 million). Shares were sold at the top of a marketed range, in the biggest IPO hosted in Tokyo since SoftBank’s 2.4 trillion yen listing in December 2018.  

The offering comes as activity in the country’s domestic market for new share sales picks up. IPO proceeds this year are about three times higher than the same period in 2022, according to data compiled by Bloomberg. Companies that listed in Tokyo after raising between US$500 million and US$1 billion over the past five years rose by an average 15 per cent in their first day of trade, compared with 33 per cent across Asia-Pacific.

Kokusai Electric’s debut takes place amid geopolitical tension over chips, with the US government and allies such as Japan tightening controls over the export of chip technology to China, the biggest market in the world. BLOOMBERG