Resourceful Automobile, a Delhi-based two-wheeler dealership, recently made headlines with its highly successful Rs 12-crore IPO. This small medium enterprise, with two showrooms and eight employees, saw an overwhelming response from investors, with bids reaching approximately Rs 4,800 crore – oversubscribed nearly 400 times.
The IPO, which offered 10.2 lakh shares at a fixed price of Rs 117, opened on Aug 22 and closed on Aug 26. Retail investors were particularly active, with aggregate demand at 24.1 crore shares, almost 500 times the subscription of the retail portion. High net-worth investors also showed strong interest, with demand nearly 150 times the total offer size, while the institutional part was subscribed a modest 12 times.
The unexpected and record-breaking subscription numbers left experts and analysts baffled. The merchant banker to the issue, City-based Swastika Investmart, admitted that they had not anticipated such a massive response. They had marketed the IPO expecting typical subscription rates of “5-10-20 times” but were taken aback by the overwhelming demand.
Renowned fund manager Samir Arora commented on the situation, calling Resourceful Automobile truly “resourceful” based on its IPO success. Social media users also weighed in, with one user highlighting the company’s negative cash flow and describing the subscription figure as “insane.”
The unprecedented success of Resourceful Automobile’s IPO serves as a testament to the growing interest and excitement surrounding small enterprises in the Indian market. Investors are clearly eager to support and participate in the growth stories of promising companies, showcasing a vibrant and dynamic investment landscape.
