TOKYO (Reuters) -Japan's largest oil refiner, Eneos Holdings ( JXHGF ), aims to raise at least 400 billion yen ($2.61 billion) by listing its wholly owned metals unit, two sources said, in what would be the nation's biggest IPO in seven years.

Eneos ( JXHGF ) expects to receive approval for the initial public offering of JX Advanced Metals (JXAM) from the Tokyo bourse as soon as this week, the sources told Reuters, declining to be named as the information is not public.

The refiner plans to sell half of its JXAM stake in the IPO and is targeting a market value of at least 800 billion yen, they said. The targeted size for the IPO launch is being reported for the first time.

Eneos ( JXHGF ) said it has no comment beyond what it has already announced. Japan Exchange Group, which owns the Tokyo Stock Exchange, said it cannot comment on individual companies.

Eneos ( JXHGF ) shares were up 1% following the report compared with a flat broader Japanese market.

At that size, JXAM's IPO would surpass subway operator Tokyo Metro's offering of last year, according to LSEG data, and be the largest listing in Japan since SoftBank's telecoms unit went public in late 2018.

Almost $6.2 billion was raised in IPOs by 87 companies in Japan last year, the largest sum since 2021, according to LSEG data.

Eneos ( JXHGF ) applied in October to list the metals unit as the refiner aims to optimise its portfolio and focus on growth areas.

JXAM is a leading manufacturer of sputtering targets, which are materials used to create thin metal films during chip production.

The unit's semiconductor materials segment contributed around a third of its 81 billion yen operating income in the last financial year.

JXAM has invested in a new plant for manufacturing sputtering targets in Arizona.

($1 = 153.3700 yen)

(Reporting by Miho Uranaka and Sam Nussey; Additional reporting by Yuka Obayashi and Noriyuki Hirata; Editing by Muralikumar Anantharaman)