Weak Market Debut for Solar Energy Player
Fujiyama Power Systems Limited, a prominent player in India's rooftop solar sector, experienced a disappointing start to its stock market journey on Thursday, November 20. Contrary to the optimistic forecasts, the company's shares were listed at a significant discount on both major Indian stock exchanges.
On the National Stock Exchange (NSE), the Fujiyama Power Systems share price opened at ₹220 per share. This was notably 3.51% lower than its issue price of ₹228. The situation was slightly more pronounced on the Bombay Stock Exchange (BSE), where the stock began trading at ₹218.40, marking a steeper discount of 4.21%.
IPO Details and Subscription Analysis
The public offering, which successfully concluded on November 17, was a substantial one. The ₹828-crore Fujiyama Power Systems IPO was a combination of a fresh issue of equity shares worth up to ₹600 crore and an offer for sale of 10 lakh shares by promoters. The price band for the offer was set at ₹216 to ₹228 per share.
Investor participation revealed a mixed picture. Overall, the IPO was subscribed 2.21 times. A deeper look shows that while the Qualified Institutional Buyer (QIB) category was oversubscribed a robust 5.24 times, the retail investor quota barely crossed the finish line with a 1.05 times subscription. The Non-Institutional Investor (NII) segment saw only 92% subscription.
The company had also secured ₹246.90 crore from anchor investors on November 12, prior to the public opening. The lead manager for the issue was Motilal Oswal Investment Advisors Ltd.
Behind the Disappointing Listing and Company Profile
The weak listing performance came as a surprise to many who were tracking the grey market premium (GMP). In the days leading up to the listing, the GMP was a mere ₹0.5 per share, which had hinted at a flat to marginally positive listing around ₹228.5. The actual debut fell well short of these tempered expectations.
So, what does Fujiyama Power Systems do? Founded in 2017, the company has carved a niche in the rooftop solar industry. It manufactures a wide array of products, including solar inverters, panels, and batteries, with a portfolio of over 522 SKUs. Its business model relies on an extensive distribution network comprising over 725 distributors and 5,546 dealers.
The proceeds from the fresh issue are earmarked for specific purposes. The company plans to use the funds for setting up a manufacturing facility in Ratlam, Madhya Pradesh, repaying certain borrowings, and for general corporate purposes.
This market debut serves as a reminder of the inherent volatility and unpredictability of initial public offerings, where even strong backing in one investor category does not always guarantee a stellar listing performance.
