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TOKYO—Shares in state-owned Japan Post Holdings Co. and its financial units rose more than 15% above their initial public offering price in their trading debut Wednesday, an initial success for the government's largest asset sale in nearly three decades.

Shares of Japan Post Holdings traded at ¥ 1,642 ($13.55) on the Tokyo Stock Exchange, 17% above the premarket IPO price of ¥ 1,400. Japan Post Bank traded at ¥ 1,683, 16% above the IPO price of ¥ 1,450. Japan Post Insurance shares traded at ¥ 2,994, 36% above the IPO price of ¥ 2,200.

The three listings together are set to fetch about ¥ 1.4 trillion ($12 billion), making it the world's biggest initial public offering since Alibaba Group Holding Ltd.'s $25 billion deal in 2014, according to Dealogic. This is also Japan's third largest IPO after the privatization of then-state-owned Nippon Telegraph & Telephone Corp. in 1987 and telecommunication provider NTT DoCoMo Inc.'s ¥ 2.1 trillion listing in 1998.

The strong stock-market reception for Japan Post's debut was underpinned by interest from retail investors who liked the relatively high dividend yield of the shares and were familiar with the Japan Post name. Last month, the offerings were priced at the top of their proposed range.

The news also bodes well for Prime Minister Shinzo Abe, who is counting on a successful listing to persuade Japanese investors to rotate more of their bank savings into stocks. Mr. Abe hopes that will give the struggling Japanese economy a boost.

The broader Nikkei Stock Average also rose 1.7% on Wednesday to top the 19,000 mark after briefly falling below 17,000 in late September on concerns about China's economy.

In Wednesday's IPO, the government is selling 11% of the shares of Japan Post Holdings to the public and the holding company in turn is selling 11% of the shares of its banking and insurance units. All of the money raised will be used to help finance recovery efforts after the 2011 earthquake and tsunami.

"Shares of Japan Post will likely see gradual growth just like the Japanese economy in the future," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

Japan Post is expected to be the government's last major privatization. The government has privatized several former state-owned monopolies in recent decades, including a railway, a telephone company and a cigarette maker.

The government allocated 80% of the shares to domestic investors and the remaining 20% to overseas institutional investors. For the deals, 11 brokerages worked as underwriters, including Nomura Securities Co., Goldman Sachs Group Inc., and Mitsubishi UFJ Morgan Stanley.

The offerings in Japan Post and its two financial units were oversubscribed and lotteries were held to allocate shares among the investors. It was reminiscent of the NTT offering in the middle of Japan's economic bubble of the 1980s, when shares rocketed in the initial months after trading. However, NTT's share price later plunged and the broader stock bubble burst, disillusioning a generation of Japanese individual investors.

Write to Atsuko Fukase at atsuko.fukase@wsj.com

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(END) Dow Jones Newswires

November 03, 2015 20:45 ET (01:45 GMT)

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