Fujiyama Power IPO: 2.21x Subscription Insights
Fujiyama Power Systems’ IPO has generated considerable interest in the Indian market, especially in the context of the growing rooftop solar sector. Opened on November 13 and concluding on November 17, it has attracted a subscription rate of 2.21 times by day three, indicating strong institutional backing despite a lukewarm response from retail investors.
The IPO comprises a new issuance of equity shares worth ₹600 crore and a sale of 10 lakh shares valued at ₹228 crore. Located in Greater Noida, Fujiyama Power specializes in manufacturing innovative products for the rooftop solar industry, which is expected to see rapid growth due to favorable government policies and increasing energy independence.
During the bidding process, qualified institutional buyers (QIBs) showed significant interest with a subscription rate of 5.54 times. In contrast, the non-institutional buyers’ segment was only 0.92 times subscribed, and the retail portion saw a minimal interest level, with a subscription of just 1.05 times. This disparity highlights the cautious approach of retail investors amidst overall market dynamics.
Analysts from various brokerage firms have provided mixed recommendations. Ventura Securities and BP Equities have both assigned “subscribe” ratings, citing the company's robust growth potential and technological advancements as key factors. They believe that the proceeds from the IPO will enhance Fujiyama’s production capabilities, particularly with plans for a new manufacturing facility in Ratlam.
However, Swastika Investmart maintained a neutral stance, indicating that while the company has strong potential, the IPO pricing may limit immediate gains for short-term investors. The IPO is priced at a P/E multiple that reflects the overall valuation trends in the sector.
The ongoing push from the Indian government to promote solar energy through initiatives like the National Solar Mission positions companies like Fujiyama Power favorably in the market. With the projected growth of the rooftop solar market at a CAGR of 40-43% from FY25 to FY30, Fujiyama Power is well-placed to capitalize on this opportunity.
Considering the expected expansion in solar installations and the declining costs of solar technology, investors are advised to keep a close watch on this IPO. The company’s strong R&D capabilities and strategic manufacturing locations across India further bolster its prospects in this promising sector.
In conclusion, while there are varying opinions on the IPO’s attractiveness, the long-term outlook for Fujiyama Power Systems in the thriving solar energy market remains positive, making it a potential candidate for long-term investment consideration.
