Boss Packaging SME IPO: 64 employees, one dilapidated office and 135x subscription!

Boss Packaging SME IPO: 64 employees, one dilapidated office and 135x subscription (Photo via @Sandeepnirvan_ on X)

Retail investors appear unfazed by SEBI’s warning on manipulation being seen in some SME IPOs, diving headfirst into yet another high-risk bet. Hot on the heels of Resourceful Automobile’s IPO frenzy, meet Boss Packing Solutions—the latest headline maker with 64 employees, a shabby office as seen on X (formerly Twitter), and a jaw-dropping 135x IPO subscription.

With an issue size of just over Rs 8 crore, the company, supplying machines for packaging, labelling, capping, and filling, received bids worth a whopping Rs 1,073 crore. The financials aren't eye-catching either after the company's profit for 2022-23 and 2023-24 remained flat, the official Boss Packaging RHP shows.

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The Ahmedabad-based company, which operates out of a small 500-square yards facility, has seen a sharp rise in net debt. The official documents show that its net rose 82 percent to Rs 3.06 crore in 2023 from 1.64 crore in the previous year.

With SME IPOs delivering roaring returns, investors have gone on to believe that ‘21 din mein paisa double’ is a reality. To be sure, the BSE SME IPO index has skyrocketed 136 percent this year, dwarfing the Sensex’s 14 percent climb. While eye-popping returns keep the frenzy alive, the real fuel behind the IPO mania comes from hype—social media buzz and paid influencer promos.

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At least five SME IPOs this year have seen jaw-dropping subscriptions of around 1,000 times, fueled mainly by retail investors. In fact, over half a dozen SME IPOs have seen retail subscriptions soar beyond 1,000 times.

Market experts are split on the SME IPO craze. For instance, renowned investor Ashish Kacholia is championing the SME platform, arguing against a heavy-handed regulatory approach. On the other, seasoned investor Vijay Kedia is voicing concerns over potential manipulation within the segment.

On August 28, the capital markets regulator issued an advisory cautioning investors regarding SME investing, even as small company IPOs continue to see massive oversubscription. SEBI has advised investors to be wary of the companies painting an unrealistic positive picture and also cautioned investors to not fall for social media tips or rumours.

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