Resourceful Automobile Stock Price :The shares of Delhi based company Resourceful Automobile were listed on BSE’s SME platform today. As much as there was craze among investors about this IPO, it disappointed equally. The company’s shares were listed at its IPO price of Rs 117 and in some time there was a rush to sell it and it came down to Rs 111 with a lower circuit of 5 percent. This company operates two bike showrooms and a service center in Delhi. But there was extreme enthusiasm among investors about its IPO. The size of the IPO was Rs 12 crore, while investors bet Rs 4769 crore in it.
Stocks to Buy: You can get 15 to 18% return in 1 month, these 3 stocks are in bullish mood after breakout
Resourceful Automobile : Was subscribed 418 times
Resourceful Automobile was readily accepted by investors and it got a bumper subscription. This IPO was subscribed 418.82 times overall. 973,200 shares were offered in it, while bids were received for 40,75,96,800 shares. The offer size was Rs 12 crore, while investors bid Rs 4,768.88 crore on the IPO. The reserve portion for retail investors was filled 496.22 times. While the reserve portion for others was filled 315.61 times.
Zomato: Zomato has given 242% return in 3 years, still a chance to earn, stock expected to rise by 29%
Losses due to excessive betting
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, says that SMEs, which contribute significantly to India’s GDP and generate employment opportunities, getting access to the capital market is a positive and desirable development. It should be encouraged. But recent developments have raised some alerts. IPOs of SMEs without any track record and strong financials are continuously coming to the market to raise funds. Many times such IPOs are being oversubscribed by retail investors seeking listing gains. This is a kind of excess of anything and should be checked. Experience tells us that excessive speculation leads to losses.
Paytm: Stock has fallen 73% from IPO price, now brokerage has issued alert, losses may increase further
SME IPO: What to keep in mind
In case of SME IPOs, companies only require approval from the exchanges and not SEBI. SMEs have fewer regulations, so investors are making money on the listing date due to higher premiums and lower free float. However, investors should keep in mind that the minimum amount for regular IPOs is around Rs 15,000, while for SME IPOs it is around Rs 1 lakh. Investors should also keep in mind that stocks are highly liquid initially but tend to fall slowly in the next 2-3 months of listing. While mainboard IPOs can be held for long-term value, SME IPOs only attract those who want to make profits in the short term.
company business
Resourceful Automobiles sells Yamaha two-wheelers under Sahni Automobiles. It services and sells two-wheelers. It has 2 showrooms and 8 permanent employees. The company will use the funds raised from the IPO to open new showrooms in NCR, repay debt and meet working capital requirements.
(Disclaimer: Views or advice on SME IPOs are given by experts and brokerage houses. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
