TOKYO - A high-stakes bid by Japan to breathe life back into its electronics sector got a tepid response from investors on Wednesday after Japan Display, fused from the struggling display units of Sony, Toshiba and Hitachi two years ago, slid 15 percent in its debut on the Tokyo Stock Exchange.
The $3.3 billion listing of Japan Display, a major supplier to Apple, comes after a government-backed restructuring effort that sought to bring bigger economies of scale to Japanese manufacturing and to sharpen its competitive edge against fast-rising Asian rivals.
But the offering, Japan’s largest this year, has been met with lukewarm interest, especially from foreign investors, who remain unconvinced of the company’s prospects against rivals in South Korea and Taiwan. That skepticism prompted Japan Display to price its offer at the bottom of its marketed range, and also scaled back the overseas part of its offer to 37.5 percent from 45 percent.
Japan Display’s offering plans have also been weighed down by a sluggish domestic stock market this year, as investors grow more wary of Prime Minister Shinzo Abe’s commitment to promised market reforms.
“It’s a disappointing I.P.O. It would seem that the company would have liked a more stable investor base, especially since it’s looking to build a growing business and invest in new capacity,†said Damian Thong, a Macquarie Capital Securities technology analyst based here.
“It could be interpreted as the market lacking confidence in the company’s position within the industry,†Mr. Thong said. “But in the end, they did get their money. They got their I.P.O. done. That’s a positive. They can now use this money to invest in their technology, and to increase scale.â€
Shares of Japan Display closed at 763 yen on Wednesday, down from the offering price of 900 yen, even as the Nikkei average rose 0.4 percent. On Tuesday, Hitachi Maxell, which makes Blu-ray discs and other storage media, also had a less-than-stellar debut, slumping 14 percent below its I.P.O. price on its first day of trading in Tokyo.
Japan Display’s offering included $1.25 billion worth of new shares issued to raise capital to invest in new factories. The government-backed Innovation Network Corporation of Japan, which led the restructuring and is the company’s biggest shareholder, sold off much of its stake, bringing its holdings down to 35.6 percent from 86.7 percent.
Other restructuring efforts backed by the Japanese government have fared poorly. Elpida Memory and Renesas Electronics, created from the chip-making operations of some of Japan’s largest electronics companies, have since failed to stand on their own: Elpida filed for bankruptcy protection in 2012 before being bought by Micron Technology last year. Renesas was taken over by the Innovation Network Corporation for restructuring after it could not stem years of losses.
Japan Display, forged in 2011 from the display units of Sony, Hitachi and Toshiba, has focused on high-resolution screens to supply to smartphone makers. The company expects to post a net income of $360 million for the financial year through March 31, more than 10 times the profit it booked last year.
