Japan Airlines IPO is considered as the second biggest IPO this year, after Facebook IPO. So no wonders everybody is paying attention for the IPO news of Japan Airlines. On one of the high profile news, it is mentioned that Japan Airlines (JAL), which has emerged from its 2010 bankruptcy with a clean balance sheet and industry topping profits, set the IPO price at 3,790 yen ($48.55) per share on Monday after gauging investor demand at 3,500 to 3,790 yen.
The fund, the Enterprise Turnaround Initiative Corporation of Japan, is selling its 96.5 percent stake in Japan Airlines in the IPO, which ranks second this year behind the $16 billion offering by social network giant Facebook.
Asia-wide, airlines trade at a median forward price-to-earnings ratio of 11.5, with Singapore Airlines at 27 times expected earnings and Qantas Airways at 10.2 times.
“In a nutshell, JAL looks cheap compared to ANA,” said Takashi Nishibori, chief editor of Tokyo IPO, a website catering to individual investors. Following the IPO, JAL will be Asia’s third-biggest carrier by market value, behind Singapore Air and Air China.
In a statement, JAL said it priced the stock at the top end of the range because demand was higher than the number of shares being offered. Three-quarters of the stock will be distributed in Japan with the remainder sold overseas.
On other news it is mentioned before that Japan Airlines Co. expected to raise $8.5 billion, after pricing its initial public offering at Y3,790, the top of the range set deliberately low to stoke investor appetite, a person with knowledge of the matter said Monday.
Despite JAL’s recent run of bumper profits, the stock on offer is priced at around five times earnings per share, much lower than industry peers like local rival All Nippon Airways Co. (9202.TO).
Looks like Japan Airlines IPO looks very promising to me!