Resourceful Automobile IPO: Deepak Shenoy’s cryptic remark on ₹1.5 crore company asking for ₹31 crore valuations

Resourceful Automobile IPO: Bengaluru-based Capitalmind Financial Services' Founder and CEO, Deepak Shenoy, recently commented on the Resourceful Automobile IPO on X (formerly Twitter). He raised doubts about the 12 crore IPO's oversubscription and questioned the company's quality. Despite its 1.5 crore earnings last year, the company is seeking a 31 crore valuation, which Shenoy finds relatively cost-effective compared to other IPOs. However, he acknowledges the uncertainty of the company's future expansion or lack thereof and emphasizes the risks associated with investing in such ventures.

"Is this company crappy? I don't know. I haven't analysed it. It's made 1.5 cr last year, and they're asking for a valuation of 31 cr. I've seen a lot more "expensive" IPOs than that - and who knows, they might even expand. Or they might not. These are risks that investors must take," said Deepak Shenoy.

Another point raised by Deepak Shenoy was whether or not this indicated that individuals were investing in subpar companies. Using Jet Airways as an example, he pointed out that the airline continued to operate for many years after it was dissolved.

“I have put notes here on twitter, in times that were less heady, that a company is GOING TO WIPE OUT ALL ITS EQUITY and your money is going to become ZERO, and people have still bought enough for upper circuits,” added Shenoy on the social media platform.

According to Deepak Shenoy, money sits in your bank account and you bid on it since it's difficult for you to acquire an allocation and it will still generate interest even if you don't receive it. Therefore, it makes little sense to look at oversubscription these days.

It didn't even work that way before since people would borrow a ton of money—between 100-200 crore—from NBFCs for four days in order to pay for ASBA applications. That was stopped by the RBI and SEBI, so now the smaller IPOs are being oversubscribed.

Resourceful Automobile IPO attracted a lot of interest from investors; on Monday, August 26, the last day of subscription, the issue was oversubscribed about 400 times. The SME IPO had 397.8 times as many subscriptions by 7 p.m. on Monday, according to BSE data, with bids totaling 40,76,48,400 shares against the 10,24,800 shares offered.

The retail investor segment had been subscribed by 496.22 times, receiving bids for 24,14,62,800 shares against 4,86,600 offered. The ₹11.99 crore Resourceful Automobile IPO, which was entirely a fresh issue of 10.25 lakh shares, opened for subscription on Thursday, August 22 and closed on Monday, August 26. Resourceful Automobile IPO price band was set at ₹117 per equity share.

Under the brand name "Sawhney Automobile," Yamaha two-wheelers are sold by Resourceful Automobile Limited, which was established in 2018. At the moment, the business operates two conceptual showrooms with a workshop connected. Yamaha's complete line of motorcycles, clothing, and accessories is available at the Blue Square shop in Dwarka, New Delhi. In New Delhi, there is another showroom on Palam Road. A variety of unique and high-quality two-wheelers, including the newest Yamaha India models and a large selection of motorcycles, are available at this dealership.

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