Kioxia Holdings, the world's third-largest NAND flash corporation (formerly Toshiba Memory), recorded a strong performance of over 10% on the first day of its debut on the Tokyo Stock Exchange. With Kioxia successfully completing the initial public offering (IPO) after three attempts, SK Hynix, which previously made an indirect investment of about 4 trillion won, also found a way to recover its investment.

Kioxia's shares closed at 1,606 yen on the Tokyo Stock Exchange on the 18th, 10.4% (151 yen) above the IPO price of 1,455 yen. This was also above the upper limit of Kioxia’s previously suggested IPO price range of 1,390 to 1,520 yen.

Nobuo Hayasaka, the President and CEO of Kioxia Holdings Corporation, and other company officials attend a ceremony to mark the company's debut on the Tokyo Stock Exchange in Tokyo on Nov. 18. /Courtesy of Reuters·Yonhap

Kioxia's shares began trading at 1,440 yen, below the IPO price, but later turned to increase. During the trading session, the stock price even rose to 1,689 yen. Analysts cited Kioxia's relatively low listing price, considering the slowdown in the memory semiconductor industry, as a background for the stock price increase. Additionally, Kioxia being the last major player in Japan's IPO market this year likely stimulated investor sentiment.

Kioxia plans to expand its free float ratio to enter the 'Prime' market, the highest level on the Tokyo Stock Exchange. According to Reuters, Kioxia requested major shareholders to sell more shares. Kioxia’s free float ratio currently stands at 28.09%, below the Prime market requirement of 35%.

Kioxia was launched in April 2017 after the Toshiba semiconductor memory business became independent, and the name was changed to its current one in October 2019. Bain Capital and other participants hold a 56% stake in Kioxia through a Korean-American-Japanese consortium, while Toshiba has a 41% stake. SK Hynix invested about 4 trillion won in this consortium in 2018.

Kioxia successfully listed after three attempts. In its bid in 2020, the COVID-19 pandemic and U.S.-China tensions hindered its progress. In 2021, due to an oversupply of NAND flash, Kioxia had to abandon its listing plan as it was difficult to receive a proper valuation.

With Kioxia's listing, SK Hynix will also be able to sell some equity to recover its investment. However, the market has projected that SK Hynix will not dispose of its equity in the short term, given that it has various strategic cards such as collaboration with Kioxia in the NAND flash business.

Through this IPO, Kioxia raised 120 billion yen (about 1.1 trillion won). Kioxia plans to use this capital to develop and increase the production of cutting-edge NAND flash.