Shares of Institute for Q-shu Pioneers of Space (iQPS) (5595.T) rose 82% on Wednesday in their Tokyo growth-market debut, after the satellite imagery startup raised 3.48 billion yen ($23.7 million) in an initial public offering (IPO).
The stock first traded at 860 yen after a nearly-five-hour trading delay due to a glut of buy orders, then faced heavy selling to end the session at the daily limit low of 710 yen.
Spun off from a Kyushu University lab in 2005, iQPS becomes the second major space venture to list in Tokyo following ispace inc's (9348.T) blistering debut in April.
Fukuoka-based iQPS has developed small satellites with the synthetic aperture radar (SAR), which takes picture of the earth's surface with microwaves. Unlike optical sensors, SAR can capture images during dark nights or through clouds and is becoming a vital remote sensing technology for national security and disaster management.
SAR imagery taken by satellite companies such as U.S.-based Capella Space and Finland's ICEYE has contributed to monitoring by the Western intelligence community of Russia's war on Ukraine.
"We chose the best IPO timing to secure enough funds to launch more satellites and get frequent data," Chief Executive Shunsuke Onishi told a press conference. "That is the most important thing to maximise SAR satellites' uninterrupted observation capabilities."
Japan is pushing to build a homegrown space industry, especially given deepening concern about China's growing technological and military clout. Japan has a number of space-related startups, including lunar transport startup ispace.
The market debuts of the two space ventures mark a stark contrast to the recent setbacks the state-funded Japan Aerospace Exploration Agency (JAXA) has faced in rocket development. In March, JAXA manually destroyed its new H3 launcher mid-air due to ignition trouble, where iQPS lost two of its satellites.
The company sold 8.92 million shares after pricing the IPO at the top of its indicated range of 380-390 yen. That doesn't include a greenshoe option of 1.34 million shares.
More than 80% of the shares were sold to domestic investors, with just under 19%, or 1.69 million, going to overseas investors.
Wednesday's closing price of 710 yen a share values iQPS at around 24.9 billion yen. A venture capital fund managed by Sparx Group (8739.T), satellite giant Sky Perfect JSAT (9412.T) and state-backed fund INCJ were among iQPS’s biggest external shareholders upon listing.
In June, iQPS successfully launched its third satellite on a SpaceX rocket, which has generated commercial imagery with resolution of as fine as 46 centimetres, it said in its prospectus. It aims to establish a "constellation" of 24 satellites around the earth to obtain near real-time data by 2028.
The government has promised "comprehensive support" for space startups with SAR, on-orbit services and other security-related technologies and announced an up to 4.1 billion yen grant each to iQPS and its domestic competitor Synspective Inc.
"State supports for the space industry have been a tailwind," said Onishi. "There's certainly no headwind."
Globally, investments in space startups recently rose for the first time in more than a year, venture capital firm Space Capital said in October, with investors returning to companies that could tap government funding amid a turbulent economy.
iQPS forecasts to book a net loss of 713 million yen in the current financial year and has not set a target for when it will turn a profit.
($1 = 146.9300 yen)
