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Urban Company Ltd, a home services marketplace, made a spectacular debut in the Indian stock market on Wednesday, rewarding investors with substantial listing gains. The stock opened at Rs 161 on the BSE and at Rs 162.25 on the NSE, reflecting a premium of almost 58% from the issue price of Rs 103.
After the debut, the stock surged and reached an intra-day high of Rs 179, posting nearly 74% returns from the IPO price. The strong stock listing follows one of the most subscribed public issues in India so far this year.
Urban Company's IPO received overwhelming interest from an entire spectrum of investors, with the issue being subscribed to more than 103 times. The QIBs led the charge and subscribed by 140x, NIIs subscribed by 74x, and retail investors subscribed by almost 39x.
In value terms, bids registered of Rs 1.14 lakh crore, making it the most subscribed issue in India this year. The IPO had a premium of Rs 51 in the grey market before its market debut, suggesting strong demand from investors.
Urban Company declared FY25 revenues of Rs 1,144.5 crore, up 38% from Rs 830 crore in FY24. The company has a P/E ratio of nearly 54 times, which is higher than industry peers. Analysts emphasize that this valuation is based on anticipated growth at a rapid pace, diversification into new service verticals, and improved profitability.
The IPO comprised a fresh issue of 4.58 crore shares worth Rs 472 crore along with an offer-for-sale (OFS) of 13.86 crore shares amounting to Rs 1,428 crore, aggregating to a total issue size of Rs 1,900 crore. The price band was fixed between Rs 98 and Rs 103 per share.
Also Read: IPOs vs. Secondary Market: Which Offers Better Returns for Investors?
Market experts are still divided regarding short-term movements but are generally optimistic about long-term prospects. Swastika Investmart head of wealth Shivani Nyati said investors could take a partial profit from the debut, and still hold the rest to profit for the long term.
Prashanth Tapse, Senior VP (Research) at Mehta Equities, also stressed Urban Company's unique position as the only organized, technology-driven player in India’s market for online home services.
Operating in 51 cities in India and overseas markets, including the UAE and Singapore, the firm is a first-mover in a fragmented sector. Tapse recommended that allottees should stay invested for the long term and suggested non-allottees look to "wait and watch" until the price dips for a possible entry.
