Over A Dozen Japanese Firms Cancel IPOs This Month

Fourteen Japanese companies have scrapped plans for initial public offerings (IPO) this month, more than in the aftermath of the Sept 2001 attacks on the United States, as the coronavirus pandemic looks set to plunge the economy into a deep recession.

The highest monthly cancellations on record in the current book-building system exceeded the 13 seen in October 2001, following the bursting of a tech bubble and the attacks on Sept 11.

The companies, ranging from an operator of child-care centres to a cyber security firm abandoned their plans after Japanese shares prices crashed to four-year low last month.

“Many companies have called off their plans as it has become difficult to sell their shares at the prices they wanted,” said Tomoichiro Kubota, a senior market analyst at Matsui Securities.

Uncertainty about how long it will take for the economy and people’s lives to return to normal after the pandemic makes it tough for investors to assess companies’ profitability and establish fair value.

“The fact that the number of IPO has dwindled on the coronavirus is a source of concern,” said Koichi Nosaka, manager of market research at Securities Japan.

“Yet that could be helping to improve the demand-supply balance of Japanese start-up share markets.”

Investors who had planned to buy new offerings might opt for existing start-up shares instead, he added.

A case in point was Nextone, a management firm of music copyrights and other digital contents that went ahead with its IPO last month.

Since listing on March 30, its shares have almost quadrupled to 6,630 yen from their IPO price of 1,700 yen.

Shares of Matsuya R&D have more than doubled in the two weeks since manufacturer of sewing machines listed on Monday last week.

The Tokyo Stock Exchange‘s Mothers start-up market index, where the two companies listed, has risen 19.2% this month, outstripping the rise of 13.5% in the main board.

Reuters

RECENT NEWS

Indian Food Delivery Unicorn Zomato Likely To File For IPO Next Month

Food delivery unicorn Zomato is planning to file for an Initial Public Offering (IPO) by April which could raise $65... Read more

Vietnams Bamboo Airways Aims Third-quarter Listing With Market Cap Of $2.73b

Vietnam’s startup Bamboo Airways said on Friday it aimed to list its shares on a local stock exchange in the thi... Read more

Didi Chuxing Advances IPO Plans To Next Quarter, Targets $62b Valuation

Chinese ride-hailing giant Didi Chuxing Technology Co. is accelerating plans for an initial public offering to as early... Read more

Warburg-backed Kalyan Jewellers IPO Loses Shine, Sees Tepid Demand

Kalyan Jewellers India Ltd’s initial public offering was oversubscribed by just 1.28 times on Thursday, a sign of tep... Read more

Chinese E-commerce Platform DMall Hires Banks For Over $500m US IPO

Chinese e-commerce platform Dmall (Beijing) E-commerce Co has hired Bank of America, Goldman Sachs and JPMorgan for a... Read more

Tencent-backed Chinese Software Firm Tuya Eyes $915m In US IPO

Tuya Inc., a software company backed by New Enterprise Associates and Tencent Holdings Ltd., is on track to raise $915 ... Read more