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Jan. 23 (Bloomberg) -- Nomura Holdings Inc., Japan’s top manager of initial public offerings in 2013, expects debut share sales will almost double to 1 trillion yen ($9.6 billion) this year as buyout funds recoup investments amid a stock rally.
“Exits from private equity will increase this year,” said Hiroshi Yoshihara, head of the IPO department at Japan’s largest brokerage. As many as 80 companies in industries such as information technology, manufacturing and solar energy may list, up from 58 in 2013, he said in an interview on Jan. 21.
Japanese stocks are the best performers in the developed world over the past year, giving companies more reason to go public and buyout firms such as Bain Capital LLC and Cerberus Capital Management LP encouragement to choose IPOs to cash in on investments. Overseas demand for Japan equities will prompt firms to market share sales internationally, said Yoshihara.
“We’ll see more global offerings as foreign investors have a strong appetite for Japanese stocks, not just individuals in Japan,” he said. “Funds that have been studying M&A and equity markets to sell their stakes will go for an IPO when the stock market is in good shape.”
Skylark Co., a Japanese restaurant operator controlled by Bain Capital, is considering an IPO in Tokyo as early as this year, two people with knowledge of the matter said last March. The Boston-based firm acquired Skylark in 2011 for 160 billion yen from a group of investors including Nomura.
Seibu Holdings Inc., part-owned by Cerberus, plans to list on the Tokyo bourse as early as April, three people familiar with the matter said last week. Seibu operates 50 hotels in Japan and abroad, including the Hawaii Prince Hotel Waikiki, as well as a commuter rail network in the Tokyo metropolitan area.
“The Japanese IPO market will probably exceed 1 trillion yen after a long interval,” Yoshihara, 50, said. Initial share sales last surpassed that amount in 2010, when they totaled 1.3 trillion yen, according to data compiled by Bloomberg.
Last year’s 58 IPOs were valued at 571 billion yen, the data show. There haven’t been more than 80 transactions since 2007. Tokyo-based Nomura arranged 27 sales last year, the most of any firm in Japan, according to the data.
Japan’s Topix Index of shares climbed 45 percent in the past 12 months as monetary easing and fiscal spending under Prime Minister Shinzo Abe spurred an economic recovery. Nomura jumped 69 percent as the stock rally fueled brokerage commissions and investment banking fees. The stock fell 0.8 percent at the close of Tokyo Stock Exchange trading today.
Nomura has been the No. 1 stock underwriter in Japan for the past 12 years, according to data compiled by Bloomberg. Fee income from its equity capital markets business climbed 13 percent in the three months ended Sept. 30 from a year earlier to 11 billion yen, company presentation materials show.
IPOs are set to pick up elsewhere in the Asia-Pacific region this year. Macquarie Group Ltd., Australia’s biggest investment bank, sees the most potential transactions in the country in six years, Hugh Falcon, co-head of equity capital markets, said in a Jan. 20 interview. In China, initial offerings resumed this month after the government lifted a freeze imposed in 2012.
Nomura, with about 80 IPO employees in Tokyo, Nagoya and Osaka, faces increasing competition to underwrite stock sales in the country, Yoshihara said. Foreign banks including Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. are managing global share sales for Japanese companies, while Daiwa Securities Group Inc. and the brokerage units of the country’s largest lenders are increasing their presence, he said.
Nomura, Morgan Stanley and JPMorgan Chase & Co. managed Suntory Beverage & Food Ltd.’s 388 billion yen debut share sale last year, the biggest in Japan for 2013. Citigroup Inc., Goldman, Mizuho Securities Co. and SMBC Nikko Securities Inc. also worked on the transaction.
“There won’t be a single global offering that excludes foreign banks,” Yoshihara said. “It’s crucial for Nomura to show our presence in the field.”
--Editors: Russell Ward, Darren Boey