Japan's Mizuho Financial Group, Inc. (TSE:8411) plans to increase its stake in online brokerage Rakuten Securities, Inc. to nearly 50% with an expected investment of about JPY 90 billion ($597 million), Nikkei has learned. The fresh injection of capital comes after the banking group bought a roughly 20% stake in Tokyo-based Rakuten Securities for about JPY 80 billion last year. Tech-focused parent Rakuten Group, Inc. (TSE:4755) seeks to raise about JPY 100 billion by listing the brokerage, with the funds to be invested in the group's mobile business.

But Rakuten Securities' decision to start offering zero-commission trades for Japanese stocks in October has complicated the roadshow for the initial public offering, which the group had aimed to complete by the end of the year. The brokerage caters to retail investors, and commissions make up a big share of its revenue. The additional investment will be announced November 9, 2023.

Factoring into the move is the stalled listing of Rakuten Securities Holdings, which is wholly owned by Rakuten Group. Rakuten Securities Holdings applied for an IPO on the Tokyo Stock Exchange in July. Sources familiar with the IPO plans said at the time that the listing was expected to take place this year.

Then in August, Japan's biggest online brokerage, SBI Securities, decided to offer zero-commission Japanese stock trades. Rakuten Securities soon followed suit, in a bid to prevent its largest rival from pulling further ahead. As of the end of March, SBI Securities had roughly 10 million brokerage accounts to Rakuten Securities' 9 million.

Mizuho subsidiary Mizuho Securities Co. Ltd. bought the stake in Rakuten Securities and counts the company as an equity-method affiliate. The status is not expected to change after the additional investment.