Rs. 12 crore IPOs last year Rs. Now, the stock is down 50%

Last year at August Gust, SME, Resource Full Automobile’s IPO made a storm on social media after receiving a subscription more than 400 times. However, a strong subscription was not a lonely argument bone because many SMEs would generally see the interest of large investors due to their rapid return. The issue was that the company Yamaha had only two-shower dealership and only 8 employees at the IPO.

The amount he raised was less than Rs 12 crore. It received the bids received Rs. 2,700 crores.

The enormous people of these investors have also argued for stringent rules for many brokers street giants, while others advocated to look gently from the policy makers.

Under the line of about seven months, the shares are more than 50% below the IPO level, the offers developed in the bull market doubts the durability of the fur. The cost of this issue is about Rs 117 for investors.

SME The surprising IPO subscription numbers were not a new event as retail and non-institutional investors went a hundred times like a stock on the offer.

For example, last year, more than 15 SME issues received subscriptions of 400 times or more, and the highest figure went over more than 2000.

These amazing numbers brought the necessary investigations by regulators. The SME must now complete the criteria of rigorous profitability, thinking of going to public.

Companies must have registered an operating pairing profit (EBITDA) of at least 1 crore in two of the last three financial years. In addition, SEBI has given a SME IPO at 20% of the total issue size to the offer-for-sales (OFS) component. Selling shareholders are also prohibited from flowing more than 50% of their current holding.

The regulator on the use of IPO income has also become clamped. Companies can no longer use funds to pay loans taken from promoters, directors or related parties. The purpose of this is to prevent any abuse of funds and ensure that capital is used for the purpose.

The strong steps brought by Sebi began to pay the dividend. This year, SME IPO subscriptions have dropped sharply and gray market activity has a close wipe-out. The most subscribed IPO was around 44x in the last two months.

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