Resourceful Automobile Shares Debut Flat at IPO Price Despite 400x Subscription
Resourceful Automobile shares had a subdued debut in the stock market on August 29, listing at Rs 117, matching their issue price on the BSE SME platform. Despite the anticipation, the shares did not show immediate gains.
The Rs 12-crore public offering attracted substantial interest, with bids for 40.76 crore shares against the 9.76 lakh shares available, resulting in an oversubscription of 419 times during the three-day bidding window. Interestingly, this Delhi-based company operates with only two outlets and employs just eight people.
The actual listing performance fell short of grey market expectations, where shares had been trading at a 89% premium. The grey market, an unofficial trading environment, often sees shares changing hands before the official IPO opens and continues trading until the listing day.
Established in 2018, Resourceful Automobile Limited, trading under the brand name “Sawhney Automobile,” offers a broad range of Yamaha two-wheelers, including commuter bikes, sports bikes, cruisers, and scooters. The company operates two concept showrooms, each equipped with a workshop. The Blue Square showroom in Dwarka, New Delhi, showcases Yamaha’s complete two-wheeler lineup, along with branded apparel and accessories. The second showroom is located on Palam Road, New Delhi.
This year has seen a significant increase in SME IPOs, often achieving record subscriptions and impressive listing gains, surpassing those of main board IPOs with more established track records and financial transparency. At least five SME IPOs have witnessed subscription rates of around 1,000 times.
On August 28, the Securities and Exchange Board of India (SEBI) issued an advisory warning investors about the risks associated with SME investments, even as small-cap IPOs continue to see massive oversubscription. SEBI cautioned investors to be vigilant about companies presenting overly optimistic scenarios and to avoid falling prey to social media tips or rumors.
