Rs. 12 crore IPO, the subscription bid is Rs. 2,700 crores. And the company has only two Yamaha dealership showrooms and eight employees.
The public offering created a huge buzz on social media for investor subscription response, despite the lack of business model.
“Resourceful Automobile SME IPO is crazy. 2 Yamaha dealership showrooms, 8 employees. IPO was asking Rs 12 crore and fetched Rs 2700 crore in bids. Is no one asking what is the terminal value of 2 dealership showrooms and 8 employees?” said one Twitter user.
“A company with only two Yamaha showrooms ready for fund raising and SME listing. I’m sure, ChatGPT should make life easier, especially to explain these types of businesses in 10-15 pages,” said another user.
Surprising IPO subscription numbers are not a new phenomenon for SME IPOs as bidding from retail and non-institutional investors is hundreds of times higher than the shares on offer.
For instance, this year alone, more than 15 SME issues have received subscriptions of 400 times or more and the highest figure has gone as high as 2000 times.
Resourceful Automobile’s IPO is a fresh equity issue of fully 10.24 lakh shares and through the issue it is worth Rs. 12 crore is planned to be collected. The company is offering its shares at Rs 117.
According to RHP, Resourceful Automobiles is engaged in the business of buying, selling and dealing in automobiles, motorcars, lorries, buses, vans, motorcycles, cycle-cars, motors, scooters, carts, amphibious vehicles and vehicles suitable for propulsion. On land, sea or air or in any combination thereof.
For the year ended February 2024, the company posted Rs. 16.53 crore gross revenue and Rs. 1.52 crore net profit was made.
Swastik Investsmart is acting as lead manager of the issue and Cameo Corporate Services is the registrar.
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