Kioxia, the chipmaker backed by Bain Capital, has raised 120 billion yen in its initial public offering, including the overallotment, with shares priced in the middle of the marketed range, according to a securities filing on Monday. The IPO price of 1,455 yen per share values the company at 784 billion yen. Kioxia, a leading memory chip manufacturer, had initially set a price range of 1,390 to 1,520 yen per share. Bain, along with other investor Toshiba, will sell shares in the IPO, while Kioxia will issue new shares, raising an additional 31 billion yen.
The IPO will be among Japan’s biggest this year, as the country’s IPO market has seen the highest volume since 2018. Corporate listings, led by subway operator Tokyo Metro Co Ltd and scientific-equipment maker Rigaku Holdings Corp, have boosted IPOs in Japan, which has been struggling with an economy stuck in deflation for years.
Investors have pumped money into the country’s IPO market because they see signs of a global economy recovery, helping drive higher corporate earnings and stocks. Moreover, the yen’s depreciation against the dollar makes it cheaper for foreign companies to list in Japan.
Despite the upturn, the number of IPOs in Japan remains low, with just under 400 issues this year, less than half the number that were listed in 2024. That may reflect a trend toward companies seeking to raise funds in the domestic market instead of abroad or the fact that borrowers who want to go public are holding off as investors remain cautious.
Buyout firms and investment banks are closely watching Kioxia’s IPO as a test case for their ability to raise money in the Japanese stock market. The flash memory maker scrapped a plan for an IPO in October last year as it struggled to compete technologically with rivals such as Samsung Electronics Co and SK Hynix Inc. The latest slump in memory prices has made it even harder for Kioxia to invest in research and expand capacity.
The company spun out of Toshiba Corp in 2018, and it could benefit from a rebound in demand for its chips as manufacturers upgrade smartphones and video game consoles later this year. However, it will face pressure to improve profitability and control costs as the industry faces intense competition. The company’s sales rose by a fifth this year to 128 billion yen, but its operating profit margin slipped to 24% from 27% in the previous year. It also faces slowing growth in NAND sales, the key product used in flash memory, making up more than 80% of its revenue. NAND demand peaked in June, and prices have slid since then. The market’s weak pricing will make it difficult for Kioxia to increase production at its plants, which have already seen output cut by around 10%.
