Mumbai: Shares of Sterling and Wilson Solar Ltd made a weak debut on the stock exchanges on Tuesday, closing at 726.20, down 6.8% from the issue price of 780. It opened at 706 on the National Stock Exchange (NSE), 9.4% below the issue price. The firm’s initial public offering was open for subscription during 6-8 August with a price band of 775-780 a share.

The NSE’s benchmark Nifty index ended at 11,017, down 36.90 points, or 0.33%, while the Sensex closed at 37,328.01, down 74.48 points, or 0.20%.

The issue was entirely an offer for sale by the promoters, with an issue size of 3,100 crore and a post-issue market capitalization of 12,500 crore at the higher price band.

“Based on FY19 consolidated numbers, the issue is priced at a price to earnings of 19.6 times. The company is likely to benefit from being the largest global EPC (engineering, procurement, and construction) contractor (in an industry that is seeing a massive thrust towards renewable energy), an asset-light business model and strong parentage," Motilal Oswal Financial Services Ltd said in a report this month.

According to Centrum Broking, at 780 apiece, the issue was priced at a price-earnings multiple of 19.6 times (post dilution) on FY19 consolidated basis, which it said was fair. “During FY19, its revenue grew by 19.9% to 8,240 crore, Ebitda (earnings before interest, tax, depreciation and amortization margin) stood at 7.8% and net profit grew by 41.3% to 639 crore. Cash and equivalents stood at 455 crore and debt to equity at 2.6 times," it added.

Sterling and Wilson, promoted by the Shapoorji Pallonji Group, is the demerged solar EPC division of Sterling and Wilson Pvt. Ltd.

It has an international presence in 26 countries, which accounted for 69.8% of its FY19 revenue.

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