Shares of Kioxia, a major manufacturer of memory chips, soared 14% in its market debut on Wednesday, valuing the company at over 890 billion yen ($5.80 billion) and highlighting strong investor demand for the third-biggest IPO in Japan this year. Kioxia, formerly known as Toshiba Memory, was acquired by a Bain-led consortium in 2018 for 2 trillion yen. The company priced its IPO in the middle of the indicative range at 1,455 yen per share, raising 120 billion yen.
The company’s listing comes as part of a strong year for IPOs in Japan, with big-ticket IPOs from Tokyo Metro and Carlyle Group-backed testing tool maker Rigaku. IPOs in Japan have raised over $6 billion so far in 2024, its best year since 2021, although the number of IPOs is at a decade low.
Kioxia’s CEO, Nobuo Hayasaka, expressed relief at the successful listing, and analysts noted that the market appeared to have reacted well to the valuation discount offered. Another analyst, Jon Withaar, praised the company’s strong performance, saying it bodes well for future private equity exits in Japan as long as valuations are reasonable.
However, not all analysts are optimistic about the company’s prospects. Richard Kaye, a Tokyo-based portfolio manager at Comgest, expressed concerns about the firm’s prospects in a highly competitive memory chip market, stating that the mooted valuation of 4-5 times price-to-sales may be hard to justify.
