HONG KONG – Rakuten Bank surged 33 per cent in its debut in Tokyo on Friday following Japan’s largest initial public offering (IPO) since 2018.

Its shares traded as high as 1,856 yen apiece. The banking unit of billionaire Hiroshi Mikitani’s Rakuten Group raised about 83.3 billion yen (S$829 million) selling the shares.

They were priced at 1,400 yen each, the top of a target range that was lowered earlier in the offering process.

Rakuten Bank’s listing revives the IPO market in Tokyo, where no first-time share sale had exceeded 50 billion yen this year. The lender and its holder marketed the shares amid high volatility for banking stocks globally, following the failures of several banks in the United States and turmoil at Credit Suisse.

Still, it is the largest debut in Japan since SoftBank’s IPO in December 2018 raised more than US$20 billion (S$26.7 billion).

Shares of 42 companies that raised more than 50 billion yen in IPOs in Japan in the 10 years prior to Friday rose by an average 7.3 per cent in their first session, according to data compiled by Bloomberg.

The performance of online lender SBI Sumishin Net Bank, which had its IPO in March, was an indication of the appetite for banking shares ahead of Rakuten’s start. The rival is up 36 per cent since its debut on March 29.

Rakuten Bank had initially set an indicative price band of 1,630 yen to 1,960 yen for the shares, then lowered the range to 1,300 yen to 1,400 yen, suggesting weaker-than-expected demand.

The listing is part of Rakuten Group’s plan to expand its financial business. Competition from Amazon.com has capped its core e-commerce revenues, while aggressive promotions for its struggling mobile unit have saddled the company with losses.

Rakuten Group offered up to 84 per cent of the shares available in the IPO, and will retain a stake of about 63 per cent in the banking unit after the listing, according to terms of the deal. BLOOMBERG