(Adds milestone, details throughout, share close)
By Miho Uranaka
TOKYO, March 22 (Reuters) - Japan's Rakuten Group Inc plans an initial public offering (IPO) of its banking arm next month, it said on Wednesday, which is set to be worth around $800 million and will be Tokyo's biggest since 2018.
The listing, first reported by Reuters, will represent a hefty cash boost for Rakuten, an e-commerce giant that for years has struggled with losses from the costly build-out of its mobile phone business. It will also be a test of market demand.
While global bank shares have been whipsawed in recent weeks following the collapse of a number of U.S. regional lenders and the turmoil at Credit Suisse, Japanese banks have so far avoided disastrous hits and are seen as being able to weather the storm.
Rakuten plans to sell 53.95 million existing shares of Rakuten Bank Ltd to both domestic and overseas investors, while the bank plans to issue 5.55 million new shares, according to regulatory filings.
The IPO is likely to total 106.8 billion yen ($807 million), based on the 1,795 yen mid-range of the indicative price. That doesn't include the greenshoe option of another 4.46 million shares.
It will be Japan's biggest initial public offering since the $23 billion listing of SoftBank Group Corp's telecom unit SoftBank Corp in December 2018, according to Refinitiv.
The shares are scheduled to be listed on April 21 on the Tokyo exchange's Prime Market.
Rakuten Bank is Japan's largest internet bank by number of accounts, with more than 13 million at the end of last year. It is one of a number of fintech companies run by Rakuten aimed at drawing customers into the group ecosystem.
Users accumulate points by using Rakuten services from credit cards, to shopping and insurance. The points can then be used to buy groceries, pay bills or book travel.
At the indicative mid-point, the listing values Rakuten Bank at around 305 billion yen ($2.31 billion), according to Reuters calculations.
Shares of Rakuten ended up almost 6% after Reuters reported the plan ahead of the announcement after the market close.
Daiwa Securities is the principal underwriter while Mitsubishi UFJ Morgan Stanley Securities and Goldman Sachs Japan are among the banks participating, according to the Tokyo exchange. ($1 = 132.3100 yen) (Reporting by Miho Uranaka; Editing by David Dolan, Rashmi Aich, Elaine Hardcastle)