Sterling & Wilson Solar Ltd, the solar engineering, procurement and construction (EPC) arm of Shapoorji Pallonji Group, made a weak debut on stock exchanges on Tuesday.
Shares began trading on the BSE at Rs 700, down 10.3% from its initial public offering price of Rs 780 apiece. The stock oscillated between Rs 755.50 and Rs 691 on the first day of trade, eventually closing 7% down from the IPO price at Rs 725.3. The company now commands a market capitalisation of Rs 11,631.7 crore.
The BSE’s benchmark Sensex closed down 0.2% on Tuesday.
The subdued listing follows an IPO that failed to garner full subscription during its three-day book-building and managed to sail through after the company trimmed its issue size due to tepid demand from retail investors and wealthy individuals.
Sterling & Wilson is the eleventh company to list on the main board of the stock exchanges this year. Five of the previous 10 companies have made strong debuts while three tanked and two others ended flat after losing initial gains.
Sterling & Wilson’s market capitalisation now stands at Rs 11,481 crore against the Rs 12,508 crore ($1.81 billion) valuation it aimed to achieve at the upper end of the price band. The Rs 12,508 crore figure in itself was lower than the Rs 18,010 crore number estimated at the time of filing of the draft prospectus in April this year.
The IPO of Sterling & Wilson was managed by ICICI Securities, Axis Capital, Credit Suisse, Deutsche Equities India, IIFL Holdings, SBI Capital Markets, IndusInd Bank and Yes Securities.
The IPO was a sale of 40.06 million shares by chief executive Khurshed Yazdi Daruvala and promoter entity Shapoorji Pallonji and Co. Pvt. Ltd.
Before Sterling & Wilson, ACME Group had filed a draft proposal to float an IPO for its solar power arm in September 2017 and was eyeing to be the first solar energy firm to go public. The company may file its IPO documents again owing to a change in valuation.
Two other renewable energy companies had also planned to go public but later shelved their plans. India’s largest green energy firm by capacity, ReNew Power Ltd, had filed its documents last May for a Rs 7,000-7,500 crore IPO. In February last year, Singapore infrastructure conglomerate Sembcorp Industries Ltd also filed for an IPO to list its India energy unit. Sembcorp dropped the IPO plan in June 2019.
India’s renewable energy sector has recorded heightened deal activity and interest from foreign investors, as the country has set an ambitious target of adding 175 gigawatts of power generation capacity by the end of 2022.