How Resourceful Automobile Became A Viral SME IPO

Market analyst Advait Arora expressed astonishment at the high subscriptions despite the company's cash flow being in negative. He added that and the company does not even own its showrooms which could be a risk factor.

However, Deepak Shenoy, founder and chief executive officer of Capitalmind Financial Services Pvt., dismissed the outrage over the IPO's extreme oversubscription saying no one is forcing anyone to buy and this is just "a sign of euphoria in the markets."

Radika Gupta, CEO of Edelweiss Mutual Fund recommended exercising caution while referring to the astonishing bids. Taking to X (formerly Twitter) she wrote, "I used to have a phrase called "sins of a bull market". This makes me think I need a much more dramatic one. Be careful folks."

Sadaf Sayeed, CEO of Muthoot Microfin mentioned how the IPO is an example of peak bull market euphoria. He was also quick to mention that the this bid frenzy is driven by GMP (Grey Market Premium) and such crazy transactions are precursors to a peaking out and the start of a downfall.

Akshay Jogani, co-founder of Xponent Tribe was among the earlier ones to notice the bid frenzy and had expressed his astonishment regarding the subscription numbers on the final day of subscription when the IPO was oversubscribed more than 200 times. He wrote, "Resourceful Automobile SME IPO is crazy 2 Yamaha dealership showrooms, 8 employees. Asking ₹12 Cr, got ~₹2700 Cr in bids. Market cap ~₹31 Cr (at IPO price) on a net worth of ~₹1.5 Cr. Yet 227x subscribed, could hit 300x by day’s end. Is no one asking what the terminal value of 2 dealership showrooms and 8 employees is?"