The IPO craze around Resourceful Automobile Limited, a company that owns just two Yamaha showrooms in Delhi with just eight employees on board, continues as its share prices rose on debut at the BSE SME index on Thursday. At the time of filing this report, the price of its shares have gone up to ₹125, up from ₹117 per share when listed yesterday. The IPO was oversubscribed by more than 400 times, raising concerns over possible share price manipulation through unrealistic picture of operations.

On Thursday, the Resourceful Automobile Limited launched its IPO with ₹117 per share. Though it witnessed a low of ₹111 during trading yesterday, it rose to a high of ₹122.85. The growth story continues even today. Resourceful Automobile Ltd's IPO was entirely a fresh equity sale with an issue size of just ₹12 crore comprising 10.24 lakh shares. The surge in share prices have been driven by strong demand across various investor categories.

Resourceful Automobile: What does the company do?

The company aims to use the proceeds from the IPO to expand its operations which is currently limited to just two showrooms in Delhi. Established in 2018, Resourceful Automobile is owned by Rahul Sawhney who is the Chairman and MD of the company. The Sawhney Automobiles, which operates under the company, sells a wide array of Yamaha products - from commuter bikes to even sportsbikes. The company plans to add more showrooms and repay its debts with the earnings from stock markets.

The Sawhney Automobiles showrooms are located in Dwarka and Mahavir Enclave. HT Auto investigated to find out that the company has employed around 45 workers at both these places, including workers at the warehouse and service workshop which are also situated near the showroom.

Resourceful Automobile IPO craze: SEBI warns investors

The share price surge comes amid SEBI's warning to investors against betting money on shares of SME companies resorting to price manipulation. The regulator said that it has noticed some of these companies have been trying to create a positive picture of their operations to boost trading after listing of their IPO. With stock price surging, it becomes an easy opportunity for the investors to offload holdings in such companies.

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