Shares of Resourceful Automobile made a weak debut on the BSE SME platform on Wednesday, listing at its issue price of ₹117, despite a massive oversubscription of 419 times during the IPO process.
In fact, the ₹12-crore public offer created a lot of buzz, with 40.76 crore shares bid for against 9.76 lakh shares on offer during the three-day bidding period. Retail and institutional interest made it oversubscribed at some proportional levels, reflecting high expectations for its market performance.
But the listing failed to live up to grey market predictions, which expected shares to list at a premium of 89%. Grey market is the unofficial trading market where shares trade prior to their official listing into the stock exchange.
Incorporated in 2018, Resourceful Automobile Limited, also doing business through its brand, Sawhney Automobile, is primarily engaged in the sale of two-wheelers under the Yamaha brand. It operates out of two showrooms in New Delhi—one in Dwarka and another on Palam Road—that carry the complete selection of Yamaha bikes, scooters, and accessories.
This IPO is part of a larger trend of SME IPOs in 2024, which have seen record-breaking subscriptions and subsequent listing gains, often outpacing more established companies on the main board. However, this surge has also attracted caution from regulators. On August 28, SEBI issued an advisory urging investors to be cautious of SME IPOs, warning against unrealistic promises and the influence of social media tips.
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Source: Moneycontrol
News Desk
