The exuberance is real! This SME IPO - Resourceful Automobile received bids worth Rs 4,768.88 crore for a fixed price issue of Rs 12 crore. The issue was subscribed approximately 400 times between August 22-26. Resourceful Automobile sells Yamaha two-wheelers under the name “Sawhney Automobile”. It runs two automobile showrooms based in New Delhi and has only 8 permanent employees on its payroll. The issue is commanding a grey market premium of almost 90% to the issue price of Rs 117 apiece. What is this irrational exuberance all about? Well in the past, SME IPOs have given massive returns and retailers don’t want to lose an opportunity to make quick money. Just for context, eight SME IPOs have given a listing day return of more than 99% in just August. This means doubling the money in a span of a week or two. The SME stock Divine Power Energy, listed on July 02, gave a listing gain of 281%. “Yes, it could go bust or the business may fail. You don't get a free ride on return, boss. There is risk. If you don't understand it, please do fixed deposits. Don't apply on FOMO,” warns Deepak Shenoy, Founder and CEO of Capital Mind in a tweet. Swastika Investmart is the lead book runner of the issue, while Cameo Corporate Services is the registrar. The market maker for Resourceful Automobile IPO is Nikunj Stock Brokers.
