Japanese railway and hotels giant Seibu Holdings returned to the Tokyo stock market Wednesday, a decade after it was de-listed following a major accounting scandal.
The stock rose 5.4 percent from its initial public offering price to 1,687 yen in morning trade, valuing the group at about 576 billion yen ($5.6 billion).
The IPO price was at the bottom end of the company's proposed range as the Tokyo stock market has lost momentum recently and global investors are becoming more selective about Japanese shares.
The firm's return to trading comes about a month after shares in Japan Display -- the world's biggest maker of screens for smartphones and tablets and a key Apple supplier -- plunged 15 percent on their Tokyo debut, following a $3.2 billion initial public offering.
Like Seibu, the screen maker was priced at the lower end of expectations, suggesting investors were wary about the sale.
Tokyo's Nikkei 225 index -- which posted its best annual return in decades last year -- has been choppy since the start of the year, with the benchmark index down more than 11 percent since January.
"Quality issues aside, the timing of this deal is just not good," said Toshihiko Matsuno, senior strategist at SMBC Friend Securities, pointing to lacklustre trading volume in the wider market.
"IPOs need participating, excited investors, something the current market lacks. Also, Seibu is not an issue people feel they must own. It could struggle."
Seibu was delisted in 2004 after a major accounting scandal. The group returned to the stock market after aggressively shedding assets, cutting costs and receiving a private bailout.
The company on Wednesday unveiled a rosy earnings forecast, saying it expected to report a 10.0 percent year-on-year rise in operating profit for the year ended in March, to be followed by another 9.7 growth rise in the year started in April.
Because the price range Seibu had set was lower than expected, its top shareholder, Cerberus Capital Management, decided not to sell shares in the listing.
Cerberus will continue to hold its current 35.4 percent stake.
Despite that decision, the company's other major shareholders, including Norinchukin Bank and Development Bank of Japan, intend to sell their shares.
Last year, Cerberus, which led a bailout of Seibu in 2006, failed to get its representatives appointed to its board -- a move the US-based fund said was aimed at helping boost the Japanese company's profitability. That followed an ugly battle between Cerberus and Seibu management over the firm's performance.
-- Dow Jones Newswires contributed to this article --