NEW DELHI: The euphoria in the primary market has breached the levels of irrationality. The same was evident in the case of an initial public offer (IPO) of an MSME -- Resourceful Automobile Ltd, a New Delhi-based dealer of Yamaha Motorcycles.
The IPO of the company attracted subscription of 419 times on the last day of sale of shares. The company has planned to raise Rs 12 crore by offering 10.25 lakh shares to the public at a price of Rs 117. It has so far attracted bids worth Rs 5,000 crore.
Retail portion of the IPO has been subscribed 500 times, while non-institutional buyers have subscribed 316 times. The company’s revenue from operations in FY24 (till 29 February) was Rs 16.53 crore, while profit during the period was merely Rs 1.5 crore.
The company plans to use 40% of the net IPO proceeds for repayment of debts, 30% for working capital needs and 19% for opening of new showrooms.