+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

Delhi firm with just 8 employees seeks ₹12 crore via IPO, gets ₹4,700 crore worth of investor applications!

Aug 27, 2024, 12:01 IST
Business Insider India
  • Resourceful Automobile, a Yamaha dealership with two showrooms has received an amazing response for its SME IPO.
  • The company’s IPO has been subscribed over 400 times, receiving bids for over ₹4,700 crore.
  • Here’s everything you need to know about the Resourceful Automobile IPO.
Advertisement
In a surprising turn of events, Resourceful Automobile, a company looking to raise funds through an SME IPO (small and medium enterprises) has received an amazing response, shocking everyone.

The company, which operates two Yamaha bike showrooms in New Delhi was looking to raise ₹11.99 crore through an initial public offering (IPO). It ended up receiving applications worth over ₹4,760 crore as the IPO has been subscribed over 418 times.


The company received bids for 40.76 crore shares against the offered 10.25 lakh shares. The company had set the share price at ₹117 per share with a lot size of 1,200 shares per application.

The IPO is set to be listed on the BSE SME platform on August 29.

Just eight employees

Resourceful Automobile has just eight employees, three in legal and finance, two in sales, two in operations and one in human resources.
Advertisement


A company that operates just two showrooms receiving such a response has resulted in mixed responses from social media, while some are talking about the expected returns, there have been calls for stricter regulation to protect the interests of retail investors.

The company will use the funds raised to open new showrooms, repay debt and meet the working capital requirements.

Analysts had asked to avoid the IPO

Several analysts had recommended users not apply for the IPO as the company operates in a highly competitive segment of two-wheeler dealerships and has been inconsistent in its financial performance.

For the year ending February 2024, the company reported a revenue of ₹17.23 crore with a profit of ₹1.52 crore. In March 2023, the company reported a revenue of 19.38 crore and a profit of just 41.5 lakh.

Why did the IPO receive such a response?

While its financials were not strong, one of the reasons for the robust subscription was the high expected return.
Advertisement

The company is currently enjoying a grey market premium of ₹85 per share, which is around 73% of its share price.

NSE tightens the norms for SME IPOs

The NSE had already tightened the norms for SME IPOs earlier this month. Starting from September 2024, only companies with positive free cash flow to equity for at least two of the last three financial years will be allowed to list in the SME segment.

SEE ALSO:

Telegram comes under the scanner in India for extortion and gambling – will it be banned in India?

Premier Energies IPO – Price band to risk factors, all you need to know

Govt warns about fake SMS asking users to update their PAN – what it is and how to stay safe
You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article