Boss Packing Solutions’ IPO Mania: A Risky Bet Or Retail Investor Frenzy? 64 Employees, Dilapidated Office, Social Media Buzz, & 135x Subscription

Following the recent Resourceful Automobile IPO, which created a buzz on the social media platform, now the spotlight has been captured by another SME segment IPO, that is, 'Boss Packing Solutions'. The Ahmedabad-based company, which started its public issue on August 30 and ended on September 3, 2024, had an overall subscription rate of 135 times its offer size.

Much of the mania surrounding these IPOs is driven by hype on social media. Recently, the photos of Boss Packing Solutions’ office, for instance, have been circulating widely on social media, particularly the X platform, adding to the frenzy.

As seen on X, Boss Packing Solutions, which operates out of a small 500-square-yard office with 64 employees, raised eyebrows as bids worth a staggering Rs 1,073 crore came in for its modest Rs 8 crore IPO issue.

The company supplies packaging, labelling, capping, and filling machines, might not look impressive on paper. Its profits have stagnated for the past two years (2022-23 and 2023-24), and net debt has sharply risen by 82 per cent - from Rs 1.64 crore to Rs 3.06 crore over the last financial year, as per the Red Herring Prospectus (RHP) filed by the company.

SME IPOs: A Betting Game?

It is also of no secret that SME IPOs have been delivering spectacular returns this year. The BSE SME IPO index has surged by 136 per cent, compared to the Sensex’s 14 per cent climb.

And that is where much of the frenzy comes from: eye-popping returns and a promise of fast profits, or as the saying goes - ‘21 din mein paisa double’.

This year alone, five SME IPOs have seen mind-boggling subscription levels of around 1,000 times. Boss Packing Solutions, though not quite reaching those heights, still saw 135 times subscription - primarily fueled by retail investors.

Social Media Hype

Yet, behind the glamorous IPO figures and online buzz lies a more sobering reality. SEBI recently issued a warning, cautioning retail investors against falling for overhyped SME IPOs.

On August 28, SEBI advised investors to be wary of companies promoting unrealistic expectations. The capital markets regulator warned against relying on tips or social media chatter, hinting at possible manipulation in some of these IPOs.

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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in IPOs involves risks and potential volatility. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions. The author and publisher are not responsible for any financial losses incurred by readers.