Shares in INCJ's Japan Display fall two days straight

It is believed to be the worst first-day performance by an IPO in Asia Pacific worth at least $1 billion since 2008.

Shares in the company closed down at JPY763 on Wednesday and then dropped to as low as JPY706 on the Tokyo Stock Exchange yesterday. The IPO price was JPY900. The stock recovered slightly this morning, opening at JPY790 but has since fallen to JPY757 - a 16% discount on the offering price.

The firm had already priced the IPO at the bottom of the indicative range. The portion of the offering allocated to overseas investors was also cut from 45% to 37.5% after bankers noted concerns over the declining cost of screens and the firm's dependence on Apple, which accounts for 30% of its business.

The listing provides a partial exit for the government-backed INCJ, which formed the company in 2012 after acquiring and then merging the struggling display units of Hitachi, Sony Corp and Toshiba Corp. INCJ has reduced its stake from 86.7% to a little over one-third, roughly doubling its money on its initial investment of JPY200 billion.

According to a regulatory filing, Japan Display will invest JPY126 billion of the proceeds from the offering in manufacturing facilities. The company expects its operating profit will leap to JPY30.4 million for the current financial year, up from JPY1.8 billion the year before. This is mainly due to the establishment of its Mobara factory in Tokyo.

The last IPO flop of this magnitude was BrisConnections Unit Trust, an Australian toll-road operator, which raised $1.1 billion from its offering in mid-2008 and fell 59% on its trading debut.

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• Topics
• North Asia
• Technology
• Exits
• IPO
• Technology
• Innovation Network Corp. of Japan (INCJ)
• Japan
• Exit