Sawhney Automobiles: The Unexpected Rs 4,800 Crore IPO That Took Delhi by Storm
New Delhi: Rahul Sawhney, the owner of Sawhney Automobiles, woke up on 29 August to find his company’s modest Initial Public Offering (IPO) turning into a sensation. What started as a small-scale IPO of Rs 12 crore unexpectedly garnered bids totaling Rs 4,800 crore—a staggering 400 times the initial offer.
This astonishing outcome has left Sawhney, his team, and the media in shock. “We never expected this!” Sawhney exclaimed, juggling celebratory kaju katli with nonstop phone calls. “I was nervous before the IPO, but now, I’m even more nervous!”
Sawhney Automobiles, registered under Resourceful Automobile, found itself catapulted into the limelight with this unforeseen success. Despite the massive attention, the showroom in Dwarka hasn’t seen a spike in foot traffic, but the media frenzy has certainly made its mark.
Now, Sawhney and his eight employees are faced with a daunting challenge—a mountain of paperwork. “We’re not suddenly rich; we just have a lot of paperwork,” quipped Sam Patel, the company’s Chief Accountant.
A Humble Beginning
Founded in 2018 by Rahul Sawhney, Sawhney Automobiles joined the Yamaha Blue Square network in 2022, becoming the exclusive Yamaha bike dealer in North India. Their showroom, located in Dwarka, is the first in the region to feature Yamaha’s latest offerings, attracting a steady stream of Yamaha employees and loan representatives from Bajaj, Tata Capital, and HDFC.
Despite the IPO’s success, Sawhney chose to keep the news low-key. “I didn’t even tell my mother,” he admitted. The secrecy was a protective measure in case the IPO didn’t perform well. However, the IPO’s viral success has turned that caution on its head, bringing nationwide attention to the company.
What’s Next for Sawhney Automobiles?
Although the IPO raised Rs 4,800 crore, Sawhney Automobiles will only keep the Rs 12 crore it initially sought. The company plans to use part of this funding to clear existing debts and expand operations, with potential new showrooms in locations like Uttam Nagar.
Sawhney attributes the IPO’s success to a recent trend of Small and Medium Enterprises (SME) IPOs, which have been attracting unprecedented attention in 2024. Resourceful Automobile’s revenues have grown steadily, from Rs 11 crore in 2020-21 to Rs 18.8 crore in 2022-23. However, the company has also taken on more debt, which they plan to address with the IPO funds.
Despite the risks outlined in their Draft Red Herring Prospectus (DRHP), Sawhney stands by his decision to be transparent with potential investors. “We have nothing to hide, so it was important to be honest with all our risk disclosures,” he stated.
A Time to Celebrate
Sawhney’s phone hasn’t stopped ringing since the IPO went viral, with many well-wishers mistakenly assuming he now has Rs 4,800 crore in hand. On Instagram, where he boasts nearly 40,000 followers, he’s shared messages of gratitude. His wife, a makeup artist with 70,000 followers, has also posted heartfelt thanks to their Guruji.
Despite the sudden success, Sawhney hasn’t planned any major purchases. Instead, he’s focused on expanding the business and embracing this unexpected turn of events. And how does he plan to celebrate this milestone? “Party, of course. What else?” he laughed, before heading back to the whirlwind of his new reality.