MUMBAI: A Rs 12-crore IPO for Resourceful Automobile, a Delhi-based two-wheeler dealership with two showrooms and eight employees, received bids worth about Rs 4,800 crore – oversubscribed 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 issue opened on Aug 22 and closed on Aug 26 (Monday). According to BSE data, at close of subscription window on Monday evening, there were bids aggregating nearly 40.8 crore shares, translating to 398 times subscription. City-based Swastika Investmart is the merchant banker to the issue.
Retail investors were the most active with aggregate demand at 24.1 crore shares, translating to nearly 500 times subscription of the retail portion in the offer. Total demand for high net-worth investors was nearly 150 times the total offer size while the institutional part was subscribed a modest 12 times.
According to a source familiar with the development, the merchant banker had marketed the Resourceful Automobile IPO like any other one that would be subscribed by “5-10-20 times” – which is not unusual for an SME IPO. However, the strong subscription numbers were “beyond expectation” of the merchant bankers. “There’s no reason for such high numbers,” a source told TOI and the people there are trying to figure out who all applied for the offer.
On X, veteran fund manager Samir Arora said, “Resourceful Automobile turned out to be resourceful indeed.” Another X user, going by the handle @EquityInsightss, pointed out that with a negative cash flow, this subscription figure was “insane”.
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 issue opened on Aug 22 and closed on Aug 26 (Monday). According to BSE data, at close of subscription window on Monday evening, there were bids aggregating nearly 40.8 crore shares, translating to 398 times subscription. City-based Swastika Investmart is the merchant banker to the issue.
Retail investors were the most active with aggregate demand at 24.1 crore shares, translating to nearly 500 times subscription of the retail portion in the offer. Total demand for high net-worth investors was nearly 150 times the total offer size while the institutional part was subscribed a modest 12 times.
According to a source familiar with the development, the merchant banker had marketed the Resourceful Automobile IPO like any other one that would be subscribed by “5-10-20 times” – which is not unusual for an SME IPO. However, the strong subscription numbers were “beyond expectation” of the merchant bankers. “There’s no reason for such high numbers,” a source told TOI and the people there are trying to figure out who all applied for the offer.
On X, veteran fund manager Samir Arora said, “Resourceful Automobile turned out to be resourceful indeed.” Another X user, going by the handle @EquityInsightss, pointed out that with a negative cash flow, this subscription figure was “insane”.
