A Rs 12-crore IPO for Resourceful Automobile, a Delhi-based two-wheeler dealership with two showro- oms and eight employees, re- ceived bids worth about Rs 4,800 crore – oversubscri- bed nearly 400 times.
The uncharacteristically high subscription figures for a small medium enterprise IPO stumped Dalal Street even as this offer’s merchant banker couldn’t justify the unexpected attention.
Resourceful Automobile offered 10.2 lakh shares at a fixed price of Rs 117. The is- sue opened on Aug 22 and closed on Aug 26 (Monday). According to BSE data, at close of subscription win- dow on Monday evening, there were bids aggregating.
nearly 40.8 crore shares, – translating to 398 times sub- scription. City-based Swas- tika Investmart is the mer- chant banker to the issue.
Retail investors were the most active with aggregate demand at 24.1 crore shares, translating to nearly 500 ti- mes subscription of the reta- il portion in the offer. Total demand for high net-worth investors was nearly 150 ti- mes the total offer size while the institutional part was subscribed a modest 12 times.
According to a source fa- miliar with the develop- ment, the merchant banker had marketed the Resource- ful Automobile IPO like any other one that would be sub- scribed by “5-10-20 times” – which is not unusual for an SME IPO. However, the strong subscription num- bers were “beyond expecta- tion” of the merchant ban- kers. There’s no reason for such high numbers,” a sour- ce told TOI and the people there are trying to figure out who all applied for the offer.
On X, veteran fund ma- nager Samir Arora said, “Resourceful Automobile turned out to be resource- ful indeed.” Another X user, going by the handle @Equi- tyInsightss, pointed out that with a negative cash flow, this subscription figu- re was “insane.
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