Primary driver: How average listing gains are pushing IPO subscriptions

Retail investors would be well advised to approach the market with caution and the exchanges must ensure that only quality issues make it to the market

The frenzy that centred round the SME (small and medium enterprises) initial public offering (IPO) of Resourceful Automobile indicates the primary market is in a phase of irrational exuberance. Resourceful Automobile, a motorcycle dealer with two showrooms and a workforce of eight, was seeking to raise a modest Rs 12 crore. It received bids worth Rs 4,800 crore. Most of the investors were retail/non-institutional. Moreover, this is not the only SME IPO that has received high levels of oversubscription in the recent past. An astounding 219,000 individuals, on average, have applied for every IPO thus far in