Urban Company shares list at 57% premium: Should you hold?
What's the story
Urban Company, a leading tech-driven home services marketplace, has made a stellar debut on the stock exchanges. The company's shares debuted at ₹161 apiece on the BSE, a premium of ₹58 or 56.31% over its issue price of ₹103 per share. On the National Stock Exchange (NSE), Urban Company shares listed at a premium of ₹59.25 or 57.52% at ₹162.25 per share.
IPO specifics
IPO details
The public offering consisted of a fresh issue of 45.8 million equity shares worth up to ₹472 crore and an offer for sale (OFS) of up to 138.6 million shares worth ₹1,428 crore. The public issue was priced at ₹98-103 per equity share with a lot size of 145 shares. It attracted strong demand from investors, getting oversubscribed by an impressive 103.63 times, mainly led by qualified institutional buyers (QIBs).
Strategic initiatives
Use of funds and company overview
The company plans to use the funds from its IPO for technology development, cloud infrastructure improvement, office rent payments, advertising campaigns, and general corporate purposes. Urban Company is a tech-driven online services marketplace providing high-quality services in various home and beauty categories. It operates in 51 cities, including 47 in India, with additional operations in the UAE and Singapore. The company has also set its sights on expanding to over 200 cities by FY30.
Financial growth
Financial performance and valuation
Urban Company has seen strong topline growth with revenue hitting ₹1,144.5 crore in FY25, a 38% jump from ₹830 crore in FY24. The company's profitability is also on the rise despite its shares being valued higher than sector peers at a P/E of around 54x on adjusted earnings. This reflects Urban Company's growth orientation and leadership position in the market for tech-enabled home services.Analysts advise holding the shares long term.