Sony on Tuesday said it would list its financial unit on the Tokyo Stock Exchange on October 11 in a move that will raise up to Y361bn ($3.1bn), making it Japan’s biggest initial public offering this year.

Sony Financial Holdings, which is predominantly a life assurer, is pressing ahead with the long-awaited IPO, which has been put back once already, in spite of concerns that recent market turmoil could undermine the listing.

The listing will test market appetite for shares of financial institutions, which have been among the hardest hit in recent trading.

T&D Holdings, the only other listed life assurer in Japan, has suffered a 29 per cent drop in its share price from a high this year of Y9,310 to Y6,650 on Tuesday.

The move comes as Sony focuses on reviving its core electronics unit, which has been on a recovery path this year, fuelled by robust sales of liquid crystal display televisions and digital cameras. Sony is on track to hit its operating profit margin of 5 per cent promised by Sir Howard Stringer after he took over as chief executive.

It plans to float about 40 per cent of its financial unit, with an assumed IPO price of Y415,000 per share and plans to sell 75,000 shares, increasing the total number of shares outstanding to 2.175m. The company will also offer up to 795,000 existing shares, including an over-allotment chunk of 70,000 shares. The price values the entire financial arm at Y903bn.

The book-building period is September 19-28, and it will be priced on October 1. About 55 per cent of the shares on offer will be allocated to domestic investors. The global bookrunners are Nomura and JPMorgan.

Analysts said appetite for the offering would be strong and that Sony would be able to raise funds in excess of Y330bn.

“We think the Y903bn valuation is low and believe the book-building might result in a valuation closer to Y485,000 a share,” said David Gibson, analyst at Macquarie.

Sony’s financial arm comprises a life assurer that has capitalised on the Sony brand to grow into one of the most successful financial institutions, a smaller non-life insurance business with strength in auto cover, and an online banking business. Sony Financial made an operating profit of Y84.1bn in the year ended March, eclipsing the company’s consolidated operating profit of Y71.8bn.

The IPO had been scheduled for fiscal 2006 but was postponed until 2007 at the earliest amid a severe downturn in Sony’s core consumer electronics business.

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