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The company plans to utilise the proceeds of the issue to repay debts, meet working capital requirements, and expand by opening new showrooms.
Shares of Resourceful Automobile made a muted stock market debut on Thursday on the BSE SME platform despite its robust subscription but ended the session in the upper circuit. The stock was listed at its issue price of Rs 117 per share. The stock hit both upper and lower circuits during the session but ended the session at the upper circuit of Rs 122.8, a gain of 5 per cent from its issue price.
After listing, the company has a market capitalisation of Rs 32.6 crore. Resourceful Automobile’s initial public offering (IPO) was a fresh issue of Rs 12 crore and raised eyebrows as it was subscribed a whopping 419 times. The company plans to utilise the proceeds of the issue to repay debts, meet working capital requirements, and expand by opening new showrooms.
The company has a dealership of Yamaha two-wheelers and two showrooms. Resourceful’s debut comes a day after the Securities and Exchange Board of India (Sebi) issued an advisory cautioning investors against taking decisions based on the ‘unrealistic picture’ painted by promoters of small and medium enterprises coming with IPOs.
The regulator also warned of a pattern in such companies where they make public announcements to create a positive picture of the operations, followed by corporate actions such as bonus issues, stock splits, or preferential allotments.
Earlier, the regulator had urged auditors to flag concerns if they see any red flags in the financials of SMEs. The number of draft documents filed for SME IPOs has also grown as promoters leverage the positive sentiment in the market. The draft documents by SMEs do not undergo the scrutiny of Sebi but are granted approvals by the exchanges.
First Published: Aug 29 2024 | 6:10 PM IST
