TOKYO — Strong demand from retail investors helped Japan Post Holdings price its IPO at the top of its proposed range, including from those unable to get in on the initial public offerings of its banking and insurance units.

“Last-minute demand started picking up in the middle of last week,” an official at a leading brokerage said Monday, when the postal group parent company settled on a share price of 1,400 yen ($11.66).

Government-owned Japan Post Holdings faced initial difficulties heading toward the Nov. 4 triple listing on the Tokyo Stock Exchange. But a welcome tailwind began to blow when the issue prices for Japan Post Bank and Japan Post Insurance were set Oct. 19. Preliminary surveys found far more investor demand than supply for their IPOs — upward of five and 10 times more, respectively. The spillover appears to aided the Japan Post Holdings offering.

This popularity reflects valuation indicators that compare favorably with those of similar private-sector companies. The price-to-book-value ratio is 0.47 for Japan Post Bank and 0.67 for Japan Post Insurance. Both have lower multiples than megabank Mitsubishi UFJ Financial Group, Dai-ichi Life Insurance or other listed peers. And both top their peers in dividend yield.

Japan Post Holdings’ P/B ratio comes to 0.41, and its 3.3% dividend yield nearly matches its banking unit’s 3.4%.

“A stock this undervalued has a low risk of falling in price,” a Nagoya man who subscribed to its IPO said.

Officials at the brokerages managing the offerings acknowledge that Japan Post Holdings shares were the hardest of the three to price. The company derives nearly all of its profit from its banking and insurance units. But it plans to reduce its ownership of them eventually, while mail delivery unit Japan Post, the group’s earnings laggard, will remain wholly owned after the IPO. Exactly where the parent company’s future earnings will come from remains unclear.

This uncertainty has been baked into its IPO price. At 1,400 yen per share, the holding company’s market capitalization totals 6.3 trillion yen. Subtract the value of its banking and insurance units — 6.52 trillion yen and 1.32 trillion yen — and the result is negative.

Japan Post Holdings has taken steps toward expanding its earnings base. The mail delivery unit bought Australian logistics group Toll Holdings in May for upward of 600 billion yen. In Japan, the group intends to pursue commercial development of the better-located parts of its vast real estate network. How the stock market rates its vision for growth will become clear after the IPO.

(Nikkei)