Following a tepid response to the initial public offering of the world’s largest solar EPC company, the listing has also been disappointing.
The shares of Sterling & Wilson Solar Limited listed at Indian bourses on 20 August at a discount of 10.26% to the offer price of Rs 780. The poor listing was the result of poor investor response and overall weak market sentiment.
The company’s shares listed at the Bombay Stock Exchange (BSE) ended the first day of trading at Rs 725. The share price briefly slipped to a low of Rs 691.
Rating agency India Ratings & Research placed high ratings for the company. However, while Sterling & Wilson Solar reported a 20% jump in revenue and a 22% increase in profit before tax in FY2019, the debt also jumped 12 times.
Equity market advisors expressed mixed opinions about what the retails investors should do with these shares. Some advisors continue to express confidence in the company due to the strong credentials of its majority stakeholder and the asset-light nature of its business.
Given the weak economic outlook in India and consumption slump leading to poor earnings of companies accompanied by a liquidity crunch, the poor response to the IPO and weak listing of the shares comes as no surprise at all.
Reference- Moneycontrol, Economic Times, Indiaratings website