Recently, an IPO was in the news and why not? After all, if investors bet Rs 4800 crore on an IPO of Rs 12 crore, then it was bound to be discussed. Resourceful Automobile Company operates only 2 bike showrooms and the bidders in its IPO surprised everyone. On Thursday, this IPO of SME category was listed in the market, but it was very poor. In fact, its shares were listed on BSE SME at the issue price band itself, meaning investors did not gain even a penny.
The company’s share got listed at Rs 117
On Thursday, the fourth trading day of the week, Sensex and Nifty are trading with gains in the stock market. Meanwhile, Resourceful Auto IPO worth Rs 12 crore was listed on BSE SME. Despite receiving a tremendous response from retail investors, its shares got a flat listing. Actually, the price band of Resourceful Automobile’s issue was fixed at Rs 117 per share and its listing also happened at the price of Rs 117. Meaning, investors have been left empty handed and have not got any benefit.
Shares crashed after listing
The disappointment of investors due to the listing at the IPO price band increased further when it started declining soon after its market debut. The stock fell to Rs 111. Earlier, the company’s stock was seen making a splash in the grey market and in view of this, market experts were expecting Resourceful Auto Share to be listed in the market at above Rs 200. But all the predictions failed and investors got a big shock.
Investors were disappointed with the IPO of the company which had 2 showrooms
Such craze for IPO has rarely been seen before, as was received for the issue of Resourceful Automobile Company. This company operates two bike showrooms in Delhi and only 8 employees work in it. Resourceful Automobile was established in the year 2018 and it offers a wide range of two-wheelers. It includes bikes of big companies, sports bikes and scooters. The company’s first showroom is in Dwarka and the second on Palam Road.
To raise money from the market, this company had launched its IPO on 22 August, in which investors had invested till 26 August. But there was a race to invest money in this IPO. Resourceful Automobile IPO Size was Rs 11.99 crore, but it was oversubscribed 418 times till the last day. The company received bids worth Rs 4768.88 crore. Of these, bids worth Rs 2825.11 crore were in the retail category, while bids worth Rs 1796.85 crore were in other categories.
This much money had to be invested for one lot
Resourceful Automobile Company had invited bids for a total of 1,024,800 shares with a face value of Rs 10 under its IPO. This was a fixed price issue and its price band was Rs 117. The lot size of the issue was fixed at 1200 shares and according to the price band, an investor had to bid for at least this many shares and make a minimum investment of Rs 1,40,000. The retail category got the highest subscription in the IPO and it was subscribed 496.22 times. Apart from this, if we talk about the high net worth category (HNI), it has been subscribed 150 times and the institutional category has been subscribed 12 times.
(Note- Before making any investment in the IPO market, please consult your market experts.)
Source (PTI) (NDTV) (HINDUSTANTIMES)