Resourceful Automobile IPO Lists at ₹117, Flat Over Issue Price

Resourceful Automobile, a Yamaha two-wheeler dealership, made a flat debut on the BSE SME platform on Thursday, August 29, 2024, with its shares listing at par with the issue price. The company's initial public offering (IPO) generated significant demand from investors during its subscription period but failed to deliver listing gains on its debut.

Listing Price: Resourceful Automobile shares were listed at ₹117 per share on the BSE SME platform, marking a flat start to its journey as a publicly traded company.

Comparison to Issue Price: The listing price is exactly the same as the IPO issue price. Resourceful Automobile had set its IPO price at ₹117 per share.

Percentage Change: There was no premium or discount at the listing, with the stock opening at 0% change from its issue price of ₹117.

First-Day Trading Performance

Opening vs. Closing Price: Following its flat opening, Resourceful Automobile's share price saw some movement during the day. By 10:50 AM, the stock had reached its 5% upper circuit limit, trading at ₹122.85.

Market Capitalisation: Resourceful Automobile's market capitalisation stood at approximately ₹24 crore based on the listing price.

Trading Volume: About 4.63 lakh shares of the company changed hands on the BSE SME platform on the first day of listing, indicating moderate investor interest.

Market Sentiment and Analysis

Market Reaction: The market's reaction to Resourceful Automobile's listing was muted compared to recent SME IPO trends. The flat listing defied grey market expectations, which had indicated a potential listing gain of around 89%.

Gains for Investors: Investors who received allotments in the IPO did not see any immediate gains at listing. However, those who held onto their shares saw some upside as the stock hit its upper circuit during the day.

Future Projections: While specific analyst projections were not provided, the company's niche focus on Yamaha two-wheelers and plans for expansion could drive future growth.

Growth Drivers and Challenges

Expected drivers of future performance:

• Expansion plans to open new showrooms in Delhi/NCR
• Increasing demand for two-wheelers
• Strong brand association with Yamaha
• Comprehensive range of products and services

Potential challenges:

• Limited geographic presence
• Dependence on a single brand
• Intense competition in the two-wheeler market
• Economic factors affecting consumer spending on vehicles

Utilisation of IPO Proceeds:

Resourceful Automobile plans to use the funds for:

• Opening new showrooms in Delhi/NCR
• Repayment of debt
• Meeting incremental working capital requirements
• General corporate purposes

Financial Performance:

The company has demonstrated growth:

• Revenue from operations of ₹16.53 crore for the eleven months ended February 29, 2024
• Net profit of ₹1.52 crore for the same period
• In FY23, the company reported revenue of ₹19.4 crore and a profit after tax of ₹41.5 lakh

As Resourceful Automobile begins its journey as a listed entity, market participants will closely monitor its ability to leverage its IPO proceeds and expand its operations to drive future growth and shareholder value.