Shares of Thai Solar Energy (TSE) more than doubled the initial public offering (IPO) price at one point on yesterday's opening day, suggesting that its recent legal woes have not spoilt investors' appetite for newly listed shares.
The solar farm's shares started trading on the Market for Alternative Investment (MAI) at 8 baht and briefly peaked at 8.05 baht before retreating slightly to close at 7.60 baht, 94.87% higher than its IPO price of 3.90 baht each.
The company's successful debut added to the IPO frenzy. So far this year, 24 newly listed companies have made debuts on both the Stock Exchange of Thailand (SET) and the MAI and only two of them saw dismal first-day trade.
"Its upbeat debut is not a surprise since investors have strong confidence in companies engaged in the alternative energy business," said Jaroonpan Wattanawong, an analyst at Maybank Kim Eng Securities (Thailand).
TSE's current market price of almost 8 baht has already priced in the company's future power-generating capacity at a combined 250 megawatts, which is planned to be fed into the power grid in the next few years, he said.
The broker conservatively set a fair value for TSE at 5.10 baht, based on its current capacity of 80 MW and another 60 MW that will be commercially generated next year.
The company, shortly ahead of its share offering, fell into a legal limbo after a former shareholder filed criminal and civil lawsuits against TSE's two major shareholders, Pracha Maleenont and Cathleen Maleenont, and sought 1 billion baht in compensation.
The former shareholder also petitioned the Securities and Exchange Commission to suspend the listing of TSE's IPO. The court dismissed the case because the evidence gave no grounds for criminal proceedings and let the IPO go ahead as planned.
Mr Jaroonpan said renewable energy's shares could continue marching up, bolstered by their growing earnings as the government plans to issue additional operating licences to catch up with rising electricity demand in the future.