The sun stops shining for Shapoorji Pallonji as solar company IPO falters

Sterling and Wilson shares tank as Shapoorji Pallonji, the controlling shareholders, drag their feet on promise of repaying Rs 23 billion debt.

Interest rates could surge, exchange rates may collapse, the sun might stop shining brightly.

Every conceivable danger an investor needs to be aware of in an initial public offering is discussed in the August prospectus of Sterling and Wilson Solar Ltd., among the world’s biggest engineering contractors to solar farms. And yet, the risk that struck hapless shareholders was buried under related-party transactions on Page 37: that the Indian company’s storied founders won’t keep their promise.

The 42% carnage in Sterling and Wilson shares over three trading sessions in Mumbai is the story of this broken pledge. Controlling shareholders had