SoftBank Secures Retail Sales Target for $21B IPO

SoftBank Group Corp.’s ¥2.4 trillion ($21 billion) initial public offering (IPO) of its domestic telecommunications business has reportedly secured sales for the majority of its shares to individual investors.

People with knowledge of the matter stated on Thursday that the lead underwriters, who set a retail sales target of approximately ¥2 trillion, obtained enough reservation at around the tentative price of ¥1,500.

One brokerage completed half of its volume at a retail branch on first the day, according to the sources.

Shares of SoftBank ended the session with a gain of 3 percent to ¥9,518.0 on Thursday.

The Japanese conglomerate is scheduled to announce the price range for the offering on Friday, following a move to fuel public interest in the IPO of the mobile unit, which will be named SoftBank Corp.

Sources said SoftBank’s strong brand, huge dividend payout, and its plan to divide the lots to make the shares available to more people, has helped encourage demand.  That could lead to a pricing range higher than ¥1,500.

The Tokyo-based firm may be able to sell as much as ¥2.6 trillion shares, provided that there is enough demand to meet the overallotment of shares, setting the company on course to beat the record market debut in Japan of telecom group Nippon Telegraph and Telephone Corp. (NTT) in 1987.

Representatives of SoftBank and the brokerages declined to comment on retail-investor demand and the price range.

Nomura Holdings Inc., Daiwa Securities Group Inc., Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Morgan Stanley Securities Co. and SBI Securities Co. are among the joint domestic lead underwriters.

The underwriters’ efforts started with a television marketing campaign that targeted a huge number of potential investors. The commercials will run through Friday. SoftBank and Mizuho also presented a plan to use a smartphone-based brokerage that they back to sell shares.

That would enable people to purchase one share at the suggested price of ¥1,500 per piece, rather than the common minimum block of 100 shares for ¥150,000.

Analyst Anthea Lai said the IPO will probably be harder to sell to foreign investors. SoftBank might also face difficulty in maintaining wireless subscribers if Japan’s e-commerce company Rakuten Inc. comes to the market with an attractive unlimited data plan, according to analyst Chris Lane.

Nevertheless, SoftBank’s executives and global coordinators for the share sale held a road show in the US, Europe, Asia, and Japan this month to pitch the IPO to analysts and fund managers.

HQBroker is here to give you a daily news roundup about the forex, commodities, technologies, automobiles, and economies. You can open an account now and make yourself updated with essential news in the market. Share your thoughts and experiences with us by commenting your HQBroker reviews.