PayPay Corp. shares climbed 14% in their Thursday trading debut after the digital payments firm completed an $879.8 million U.S. initial public offering, marking the largest U.S. exchange listing by a Japanese company in ten years.
The company’s American depositary receipts finished at $18.16 each in New York, above the IPO price of $16 per ADR. The offering had been priced below an initially indicated range of $17 to $20. Based on the outstanding shares detailed in its regulatory filings, the stock’s performance gives PayPay a market capitalization of approximately $12.1 billion.
In the IPO, PayPay sold 31.1 million ADRs, while an affiliate of SoftBank Vision Fund II, an investment vehicle of the Japanese conglomerate, sold 23.9 million ADRs. Each ADR represents one ordinary share.
The company postponed the official launch of its marketing efforts due to uncertainties stemming from Middle East conflicts. Prior to the final pricing, the offering had attracted institutional investor demand for multiple times the number of ADRs available.
According to the filings, Abu Dhabi Investment Authority, a subsidiary of Qatar Investment Authority, and an affiliate of payments leader Visa Inc. collectively agreed to purchase up to $220 million worth of shares. The IPO also included a public offering of approximately 8.7 million ADRs by Mizuho Financial Group Inc. in Japan, without a local listing, at the same price as the U.S. offering.
Data from Bloomberg indicates that PayPay’s IPO is the largest U.S. debut by a Japanese company since mobile messaging service Line Corp. raised $1.3 billion in a dual listing in Tokyo and New York in 2016.
Regulatory documents show that for the nine months ended December, the business reported a profit of ¥103.3 billion ($656 million) on revenue of ¥278.5 billion, compared to a profit of ¥28.96 billion on revenue of ¥220.4 billion in the same period a year earlier.
PayPay was established in 2018 as a joint venture with Paytm, an Indian payments company backed by the Vision Fund. As of December, PayPay had more than 72 million users in a country with a population of around 123 million.
Ahead of its global offering, PayPay has been intensifying its efforts to expand internationally. Last year, the company enabled its service for use by Japanese customers at over 2 million retail locations in South Korea. In February, it revealed a collaboration with Visa to explore opportunities in the United States.
The listing occurs as SoftBank liquidates more assets to fund new investments in artificial intelligence. The technology investor disclosed that it sold nearly $13 billion worth of T-Mobile US Inc. shares just between June and December.
Following the IPO, SoftBank Group is expected to hold roughly 92% of the voting power in PayPay, as per the filings.
The offering was managed by Goldman Sachs Group Inc., JPMorgan Chase & Co., Mizuho, and Morgan Stanley. The company is listed on the Nasdaq Global Select Market under the ticker symbol PAYP.
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