Japanese e-commerce giant Rakuten Group Inc (OTC:RKUNF) will test the market with public offer on the Tokyo stock exchange of its banking arm next month, targeting a US$807mln (£657mln) equity fundraise.
According to Reuters, Rakuten plans to sell 54 million existing shares of its Rakuten Bank subsidiary to both domestic and overseas investors, alongside the issuance 5.55 million new shares.
Rakuten Bank has served as a strong hedge against losses in Rakuten’s mobile business in recent years.
The group’s latest financial statement for the year ending 2022 underscored a 28.5% year-on-year operating income increase to 38 billion Japanese yen (£232mln) for Rakuten Bank, while Rakuten Mobile increase operating losses from -404 billion yen to -459 billion yen.
News of the IPO caused shares in Rakuten to rise by almost 6% on Wednesday, with investors keeping a close eye on the e-commerce giant's move into the banking sector.
The IPO comes at a time of turmoil in the global banking sector following the collapse of Silicon Valley Bank and subsequent contagion risks, culminating in a takeover of Credit Suisse by rival UBS.
Japan’s TOPIX Banks Index has fallen by around 15% since March 10.
The listing date on the Tokyo Stock Exchange Prime Market is scheduled for April 21, 2023