Japan Airlines priced the IPO of one of Japan's most remarkable turnaround stories to raise nearly $8.5 billion. Its next challenge is to persuade its legions of Japanese retail investors to stay the course with the world's second-biggest initial public offering this year.

Mom-and-pop investors represent up to 70 per cent of the new shareholders in an airline that rapidly recovered from bankruptcy in 2010. Executives, under the leadership of management guru Kazuo Inamori, now must convince them not to sell too quickly, preventing the IPO from following the path of Facebook's $US16 billion offering, the largest in the world this year. That deal has since fizzled amid questions about Facebook's business prospects; shares trade at less than half the IPO price.

But unlike the Facebook IPO, in which both the price range and the number of shares sold were increased in the final days, shares in JAL were deliberately valued modestly relative to other airline stocks.

After a week of order-taking, JAL last night priced its IPO at ¥3,790 ($46.85), the top of its proposed price range. The carrier said demand for the 175 million shares being sold by Enterprise Turnaround Initiative Corp, the government-backed agency that injected ¥350 billion into JAL to help keep its jets in the air less than three years ago, "sufficiently exceeded" the stock on offer.

The result was largely in line with market expectations. Investors had said for weeks that the ¥3,500-¥3,790 range set in late August looked cheap, translating to just 5.3 times earnings, while local rival All Nippon Airways shares currently trade at well at over 13 times earnings. At the price set for its Sept. 19 listing, JAL will have a stock-market value of ¥687 billion, ahead of ANA's closing market value last night of ¥633 billion.