For an INR 12 crore IPO, the subscription bids have come at INR 2,700 crore. And the company has just two Yamaha dealership showrooms and eight employees.
The public offer created a strong buzz on social media for the subscription response from investors, despite an underwhelming business model.
"Resourceful Automobile SME IPO is crazy. 2 Yamaha dealership showrooms, 8 employees. The IPO was asking INR 12 crore and got INR 2700 crore in bids. Is no one asking what the terminal value of 2 dealership showrooms and 8 employees is?," said a Twitter user.
"Company with just two Yamaha Showrooms is up for fund raise and SME listing. Am sure, ChatGPT must be making life easy, especially to explain these kinds of businesses in 10-15 pages," said another user.
The staggering IPO subscription numbers for SME IPOs is not a new phenomenon as retail and non-institutional investoRs' biddings go into many hundred times as against the shares on offer.
For instance, this year alone, over 15 SME issues have received 400 times subscription or more and the highest figure went as much as over 2000 times.
The IPO of Resourceful Automobile is entirely a fresh equity issue of 10.24 lakh shares and through the issue, it plans to raise INR 12 crore. The company is offering its shares at INR 117 a piece.
According to the RHP, Resourceful Automobile is engaged in the business of buying, selling and dealing in, automobiles, motorcars, lorries, buses, vans, motorcycles, cycle-cars, motor, scooters, carriages, amphibious vehicles, and vehicles suitable for propulsion on land, sea or in the air or in any combination thereof.
For the year ended February 2024, the company clocked total revenues of INR 16.53 crore and net profit of INR 1.52 crore.
Swastika Investmart is acting as the lead manager to the issue and Cameo Corporate Services is the registrar.
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