Resourceful Automobile shares list flat at IPO price despite 400x subscription

At least five SME IPOs have seen subscriptions of around 1,000 times this year

Shares of Resourceful Automobile made a muted stock market debut on August 29 after it listed at Rs 117, the same as the issue price of Rs 117 on the BSE SME platform.

The Rs 12-crore public offer garnered significant attention, receiving 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 period. Interestingly, the Delhi-based company operates with only two outlets and has a workforce of just eight people.

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The listing gains have missed grey market estimates completely where shares were trading at a premium of 89 percent. The grey market is an unofficial ecosystem where shares start trading much before the offer opens for subscription and continue to trade till the listing day.

Founded in 2018, Resourceful Automobile Limited operates under the brand "Sawhney Automobile," offering a comprehensive range of Yamaha two-wheelers, including commuter bikes, sports bikes, cruisers, and scooters. The company has two conceptual showrooms, each with an attached workshop. The Blue Square showroom in Dwarka, New Delhi, displays the full lineup of Yamaha two-wheelers, along with apparel and accessories. The second showroom is located on Palam Road, New Delhi.

This year has been marked by a surge in SME IPOs attracting record subscriptions, followed by impressive listing gains—a feat often unmatched by main board IPOs with stronger track records, disclosures, and financials. At least five SME IPOs have seen subscriptions of around 1,000 times.

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

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