Shares of Japanese computer memory manufacturer Kioxia rose 2.69% in early trading on its debut in Tokyo after the company raised approximately 120 billion yen ($800 million) through its initial public offering (IPO). At 9:14 a.m. Tokyo time, Kioxia’s shares were trading at 1,484 yen, slightly above the offer price of 1,455 yen per share, which was the midpoint of its IPO price band, ranging from 1,390 to 1,520 yen.
The company initially offered 71.8 million shares, but it later exercised an overallotment option, making an additional 10.79 million shares available for sale, according to a filing in Japanese on Monday. The IPO was a combination of new shares issued by Kioxia and a sale of shares from major shareholders, including Bain Capital and Toshiba.
In an early report on Wednesday, Reuters highlighted that Kioxia had requested its major shareholders to sell more shares to meet the listing requirements of the Tokyo Stock Exchange’s Prime market. Kioxia disclosed that the ratio of shares in the market stood at 28.09%, which is below the Prime market’s requirement of 35%. The company’s efforts to meet these criteria were part of its strategy to ensure its eligibility for the Prime market, a prestigious tier of the Tokyo Stock Exchange.
Kioxia, which was formerly known as Toshiba Memory, was the semiconductor division of Toshiba. In 2018, the division was sold to a Bain Capital-led consortium for $18 billion. This marks Kioxia’s third attempt to go public. Initially, the company had planned to launch its IPO in 2020, but it postponed its listing due to concerns over market volatility and fears about a second wave of the COVID-19 pandemic. At the time, Kioxia stated that it was in the best interest of shareholders to delay the public offering.
In September, Reuters reported that Bain Capital had scrapped its IPO plans for October due to a sell-off in Japanese stocks during August. The market conditions made it challenging for the consortium to achieve the 1.5-trillion-yen valuation that it had been targeting for Kioxia. Despite these challenges, the company proceeded with its listing in Tokyo, demonstrating its resilience in navigating the volatile market environment.
Kioxia’s IPO reflects growing interest in the semiconductor industry, which has seen significant activity in recent years as global demand for computer memory chips continues to rise.
