Arm’s IPO already 10 times oversubscribed

Company will close its order book a day early on Tuesday and the public offering could be oversubscribed by up to 15 times by Wednesday

British chip maker Arm, owned by Japan's SoftBank, has set a valuation target of up to $54.5 billion when it lists on the New York Stock Exchange. AFP

Arm Holdings’ initial public offering is already oversubscribed by 10 times and bankers plan to stop taking orders by Tuesday afternoon, according to sources.

Arm, controlled by SoftBank Group, will close its order book a day early on Tuesday, but is still planning to price its shares on Wednesday, the sources said.

It is not uncommon for books to close early on an IPO, which often indicates strong demand.

The offering could end up as much as 15 times oversubscribed by Wednesday, the sources added. Nothing has been finalised and the IPO orders could always change. The Financial Times previously reported that the Arm order book would close early.

A representative for Arm declined to comment.

Arm is still considering raising the price range of its IPO as well, Bloomberg News previously reported. Arm filed for its IPO at $47 to $51 a share, which could value the company at $54.5 billion at the high end of the range.

SoftBank shares rose as much as 3.8 per cent during morning trade in Tokyo, headed for their third straight day of gains. The stock is up about 20 per cent since the start of the year.

Arm – which is a key part of the chip supply chain, designing semiconductors found in most of the world’s smartphones – had earlier sought to be valued at $60 billion to $70 billion in the IPO. SoftBank bought Vision Fund’s stake in Arm at a valuation of more than $64 billion.

After the IPO, SoftBank will control about 90 per cent of Arm’s shares, leaving a limited free float in the market.

A successful debut by Arm would provide a windfall for SoftBank founder Masayoshi Son, whose Vision Fund lost a record $30 billion last year.

The listing could also revitalise the US IPO market, with online grocery delivery company Instacart and marketing and data automation provider Klaviyo among those ready to pursue their first-time share sales.