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Tiny Yamaha Dealership Attracts Bumper Subscription - But How?

The investors said that the company's SME IPO is crazy, where two Yamaha dealership showrooms with just eight employees are sparking a frenzy despite an initial asking price of Rs 12 crore.

IPO Edited by Updated: Aug 27, 2024, 7:21 pm
Tiny Yamaha Dealership Attracts Bumper Subscription - But How?

On August 26, it received a stupefying 400 times subscription as in the final bidding leading to widespread discussion on various social media platforms, especially X.

A recent SME IPO (Initial Public Offering) has been trending on the X platform on Monday as it was deluged with various tweets and responses from the investors coupled with a high Grey Market Premium (GMP) despite its fragile fundamentals. In New Delhi, there is a Resourceful Automobile operating just two Yamaha showrooms consisting of only 8 people. On August 26, it received a stupefying 400 times subscription as in the final bidding. This led to widespread discussion on various social media platforms, especially X.

The IPO was opened on August 22 and witnessed a bid that the expected outcome as the issue size of the IPO is about Rs 12 crore officially named to Cameo Corporate Services. Two showrooms with 8 employees under the name ‘Sawhney Automobiles” will be listed on the BSE SME platform on the coming 29th as the allotment status is set to be declared on August 27.

Resourceful Automobiles plans to use the IPO to expand its operations. The company is set to inaugurate two new room showrooms within Delhi aiming at debt repayment and also to cope with working capital needs as per the company’s Red Herring Prospectus (RHP).

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The investors said that the company’s SME IPO is crazy, where two Yamaha dealership showrooms with just eight employees are sparking a frenzy despite an initial asking price of Rs 12 crore as the bids have skyrocketed to approximately Rs 2700 crore. This is particularly astonishing given the company’s modest market capitalisation of Rs 31 crore (based on IPO price) and net worth of merely Rs 1.5 crore, questioning the true terminal value of this tiny business, comprising just two showrooms with just 8 employees.

The shares are affirming a premium of up to 70 per cent in the unlisted market, although the high GMP is triggering caution among the traders who raise concerns over social media platforms. A user said that the current GMP above 70% per cent with a handful of employees selling two-wheelers in 2 showrooms looks fabricated as he is astounded by that whopping percentage. This high liquidity and oversubscription have confused market observers as they are unsure about the responses that the outcome is based on mere speculations that they noted the contradictions between the noted the dissonance between the company’s recent performance and the current market interest.

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Topics
IPO Resourceful Automobiles SmE X platform Yamaha showroom

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