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Kokusai Electric Shares Surge in Tokyo Debut, Marks Japan's Largest IPO in Five Years

Equities of the semiconductor equipment maker, a Hitachi subsidiary spun off by KKR, soar up to 32%, raising 108 billion yen ($724 million); despite concerns about the smartphone semiconductor market, positive investor sentiment reflects potential market rebound and opportunities beyond memory chips.

Overview

  • Kokusai Electric's debut on the Tokyo Stock Exchange saw its stock rise as much as 32%, marking Japan's largest initial public offering (IPO) in five years.
  • The IPO included the sale of about 58.8 million shares, raising a total of 108 billion yen ($724 million) and valuing Kokusai at approximately 424 billion yen.
  • Despite current weaknesses in the smartphone semiconductor market, analyst comments suggest expectation of a market rebound, as well as opportunities for Kokusai Electric beyond memory chips.
  • Private equity firm KKR owns around 47.7% stake in Kokusai after the IPO, reduced from 73.2%, and might seek to sell their remaining stocks after the 180-day lock-up period.
  • KKR's initial acquisition and subsequent spin-off of Kokusai Electric, a former Hitachi subsidiary, appear advantageous despite Kokusai's potential struggles against semiconductor industry rivals like Tokyo Electron and Lasertec.