IPO representative image.
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A Rs 12 crore IPO for Resourceful Automobile, a Delhi-based two-wheeler dealership with just two showrooms and eight employees, saw bids totaling approximately Rs 4,800 crore, resulting in an oversubscription of nearly 400 times.
A report in Times of India said that the unusually high level of interest in this small to medium enterprise IPO baffled Dalal Street even as the offer's merchant banker struggled to explain the surprising attention.
As per the report, the company offered 10.2 lakh shares at a fixed price of Rs 117 with the issue opening on August 22 and closing on August 26. However, at the closing of subscription window on August 26 (Monday), the BSE data showed bids aggregating nearly 40.8 crore shares. This is equivalent to 398 times the subscription.
Retail investors were the most interested in the company shares with aggregate demand of 24.1 crore shares. Delhi-based Swastika Investmart is the merchant banker to the issue.
The high subscription numbers have left experts shocked. Meanwhile, users on X (formerly Twitter) are pointing out how the figures are "insane" for an enterprise with "negative cash flow''.
People also made pun on the name of the enterprise as one user wrote, "Resourceful Automobile turned out to be resourceful indeed."
Resourceful Automobile was started in the year 2018. The company sells two-wheelers under 'Sawhney Automobile'. Sawhney Automobile offers a wide range of two-wheelers according to the needs of different customers.
The company currently has two showrooms with attached workshops. One showroom of the company is in Blue Square Dwarka, New Delhi while the second showroom of the company is in Palam Road, New Delhi. As per the data till July 31, 2024, the company has a total of eight permanent employees.