Sterling And Wilson Solar Falls 7% Below IPO Price On Listing Day
Sterling and Wilson Solar shares fell 7% from its IPO price on listing day, after its Aug. 6-8 IPO failed to get fully subscribed.
Shares of Sterling and Wilson Solar Ltd. fell 7 percent from its IPO price on listing day, after its Aug. 6-8 initial public offering failed to get full subscription.
The stock debuted at Rs 700, a 10.2 percent discount on its issue price of Rs 780. It however recovered to end the day 7.01 percent lower at Rs 725.35. Intraday, the stock saw a high of Rs 755 and a low of Rs 691.
Sterling and Wilson Solar's Rs 3,125 crore IPO was subscribed 92 percent, with global institutional buyers picking up the bulk of shares on offer. The QIB portion of the issue received full subscription, while the high net-worth investors bought 89 percent of the shares allocated to them. The retail portion of the IPO saw 30 percent subscription.
Promoters Shapoorji Pallonji and Khurshed Yazdi Daruvala had put on the block shares worth Rs 2,083 crore and Rs 1,042 crore, respectively, in the Sterling and Wilson Solar IPO. Around Rs 1,400 crore was raised from anchor investors. At the upper end of the Rs 775-780 price band, the company was valued at Rs 12,500 crore.
Sterling and Wilson Solar, present in 26 countries, commissioned and contracted 205 solar power projects with a total capacity of 6,870.12 megawatts as of Mar. 31, 2019, according to its red herring prospectus.
Going forward, the company intends to be a free cash flow company.
“We will require to build a large enough net worth, but once you build a threshold net worth, beyond that you will give out most of what you earn,” Daruvala, chairman at Sterling and Wilson Solar, said in a conversation with BloombergQuint. “In the future, it will be a very high ratio for dividend payout.”
The company is also expanding into new geographies, he said, adding that it will start generating revenue from this year and next year.
In 2015-16, Sterling and Wilson Solar generated 100 percent of its orders from India. Now it has diversified its order book. The company’s order book stood at Rs 3,831 crore as of March 31, and it has received letter of intent for orders worth Rs 3,908 crore, according to the red herring prospectus.