Shares of Urban Company, a tech-driven online full stack home services platform, made a strong debut on bourses, getting listed at a premium of over 55 per cent.
On the BSE, the company’s share opened at Rs 161 apiece, a premium of 56 per cent to the upper price band, and on the NSE it opened at Rs 162.25 per share, a premium of 57.52 per cent. The upper band of the company’s initial public offering was Rs 103 a share.
The scrip rose 62.18 per cent, or Rs 64.05 to settle at Rs 167.05 a share on the BSE. It finished the session at Rs 169 apiece, up 64.08 per cent, or Rs 66 on the NSE.
“Strong listing was above our expectations. Despite listing pop, Urban Company presents a compelling long-term structural story and can serve as a proxy for the growing demand in the home services segment across its key geographies,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
“We continue to recommend allotted investors who can take near term risk to ‘HOLD’ the stock from a long-term investment perspective, keeping in mind the inherent market risks,” he said.
For investors who were not allotted shares in the IPO, a ‘wait and watch’ approach is advisable to assess any post-listing dip as a potential entry point, Tapse added.
Urban Company IPO
The Urban Company’s Rs 1,900.24 crore initial public offer was a combination of fresh issue of 4.58 crore shares aggregating to Rs 472.24 crore, and offer for sale of 13.86 crore shares amounting to Rs 1,428 crore. The price band of the issue was fixed at Rs 98-103 per share. The issue opened for subscription on September 10 and closed on September 12.
Robust demand for IPO
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The Urban Company’s Rs 1,900 crore IPO received an overwhelming response, getting oversubscribed 103.63 times. Investors bid for 1,106.46 crore shares as against 10.68 crore offered. The retail portion of the issue got subscribed 39 times, with nearly 76 crore bids being received compared to 1.93 crore offered.
The qualified institutional buyers (QIB) category saw a subscription of 140.2 times, with investors placing bids for 814 crore as against 5.81 crore offered. The non-institutional investor portion got subscribed 74.04 times. The employees bid for 1.03 crore shares, as against 2.81 lakh offered to them, representing a subscription of 36.79 times.
“The robust response is well supported from a long-term investment perspective. Urban Company is currently the only organized player in the tech-driven online home services marketplace, enjoying a leadership position across 51 cities in India, as well as in international markets like the UAE and Singapore. Its strong brand recall and first-mover advantage position it as a preferred service provider in a largely fragmented sector,” Tapse added.
The company had raised Rs 569.25 crore through anchor investors.
© The Indian Express Pvt Ltd
