The company, which is 53.4% owned by the central government with the rest held by the Tokyo government, will be listed in the financial year that begins in April.

Half the company is slated to be sold with each government planning to sell half their stakes, according to a 2022 government document that laid out plans for the offering.

A Tokyo Metro IPO could raise about 300 billion yen ($2 billion), the finance ministry said in 2022. No updated guidance on the fundraising amount sought was given on Friday.

The central government plans to use the proceeds from its portion of the sale to fund recovery efforts from the massive earthquake that struck the Fukushima area and other parts of northeastern Japan in 2011.

The railway company carries 5.95 million passengers each day on average over a 195 kilometre network of tracks. It posted a net profit of 24.2 billion yen in the April-September period on sales of 40.4 billion yen.

The IPO is likely to attract individual investors, especially given the government's recent overhaul of a tax-free stock investment programme, said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute.

"Tokyo Metro is also a public transport system which is a easy stock for individual investors to buy into," Suzuki said. "The company's business is sustainable."

The Tokyo government has set aside 3.6 billion yen for costs related to the sales of shares in the upcoming financial year's budget, according to a document released Friday.

That budget is earmarked for underwriting fees, a Tokyo government official said.

"We'll be discussing the specifics with the relevant parties in the future," Tokyo Governor Yuriko Koike told reporters, declining to comment on a more specific timing for the listing.

The Japanese government in 2022 picked five brokerage firms - Nomura, Mizuho, Mitsubishi UFJ Morgan Stanley, Goldman Sachs and Bank of America - to lead the subway's IPO. It has been delayed due to the coronavirus pandemic.

($1 = 147.7700 yen)

(Reporting by Satoshi Sugiyama and Kantaro Komiya; Additional reporting by Junko Fujita, Tetsushi Kajimoto, Makiko Yamazaki and Chang-Ran Kim; Editing by Edwina Gibbs)

By Satoshi Sugiyama and Kantaro Komiya