Urban Company IPO allotment finalised, GMP signals strong listing tomorrow
What's the story
Urban Company's shares will be listed on the BSE and NSE at 10:00am tomorrow. Analysts expect a stellar debut with a gain of 50% over the issue price, given the current GMP. The ₹1,900 crore IPO was subscribed an impressive 103.63 times between September 10-12 and allottment was finalised yesterday. The strong demand from investors and positive market sentiment are driving the optimism around this stock.
Subscription details
Strong response from all investor categories
The IPO saw a strong response from all categories of investors. Qualified institutional buyers subscribed 140.20 times their quota, while non-institutional investors (high-net-worth individuals) subscribed 74.04 times. Retail investors bought 39.25 times their portion and employees subscribed to 36.79 times the reserved shares. Despite being pricey on valuation and launching in a relatively dull market, Urban Company's IPO witnessed strong demand due to the robust subscription levels across investor categories.
Investment advice
Hold for long-term gains, say experts
Prashanth Tapse of Mehta Equities said, "Given the high subscription levels and positive sentiment, we expect a strong listing gain in the range of 40-50% or even higher." He also highlighted that beyond the immediate listing pop, Urban Company offers a compelling long-term structural story. Tapse advised allotted investors to hold onto their stocks with a long-term view while suggesting non-allottees to wait for entry opportunities post-listing.
Pricing details
Shares trading at 55% premium in the gray market
At the time of writing, shares of Urban Company were trading at a 55% premium in the gray market. The company had priced its IPO in the fixed band of ₹98-103 per share, valuing it at ₹14,790 crore at the upper end. Urban Company had already raised ₹854 crore from marquee anchor investors such as SBI Funds, Monetary Authority of Singapore and HDFC MF among others.
Share distribution
IPO comprised fresh issue and OFS
The IPO consisted of a fresh issue of ₹472 crore and an offer for sale (OFS) of ₹1,428 crore by existing investors. Key shareholders reducing stakes include Accel India, Elevation Capital, Bessemer India Capital Holdings II Ltd., Internet Fund V Pte. Ltd., and VYC11 Ltd. The listing will provide partial exits to early backers such as Accel, Elevation, and Tiger Global.
Company overview
Tech-enabled services marketplace
Urban Company is a tech-enabled full-stack online services marketplace. It provides quality-focused solutions across 51 cities in India, UAE, and Singapore. In Saudi Arabia, it operates through a joint venture. The platform allows customers to book services like cleaning, pest control, plumbing, carpentry work, and salon services, among others. These are provided by trained independent professionals on-demand at their convenience.