Sources said Japan's national and Tokyo governments were seeking a 700 billion yen valuation for the Tokyo Metro as they prepare to list the subway operator as early as the end of October.

If the deal goes ahead, it would be Japan's biggest initial public offering (IPO) in roughly six years.

The two governments, which own 100 percent of Tokyo Metro, plan to arrange a meeting of brokerages within a week for a briefing on the IPO and expect to receive approval for the listing from the Tokyo Stock Exchange as soon as mid-September, sources told the Reuters news agency.

With half the company to be sold, the IPO could raise 350 billion yen, which would exceed the size of Kokusai Electric's IPO last year and become the largest since SoftBank Group listed its wireless unit in 2018.

The IPO follows the listing of other railway operators, including Kyushu Railway (JR Kyushu) in 2016.

Tokyo Metro runs 195 kilometres of lines carrying 6.5 million passengers daily.

Tokyo Metro's history dates back to 1920 with the establishment of the Tokyo Underground Railway Company.

Seven years later, it opened Japan's first subway line, between the Asakusa and Ueno districts of Tokyo.

The company, whose business includes real estate and retail, reported net profit jumped by two-thirds to 46 billion yen in the financial year ended March 2024 as economic activity rebounded from the pandemic.

The central Japanese government, which owns 53.4 percent of Tokyo Metro, plans to use the funds raised to repay reconstruction bonds issued following the 2011 earthquake and tsunami.

The Tokyo government holds the remaining 46.6 percent of the subway operator.

Nomura, Mizuho and Goldman Sachs are the joint global coordinators for the listing. (Reuters)