Urban Company has left a big mark in the world of the stock market. The home services app, being very popular, opened its Rs 1,900 crore IPO on Wednesday, September 10, and it was nothing less than phenomenal.
In just a few hours of going public, the IPO saw 3.3x subscription, indicating that people were eager to purchase more than triple the number of shares offered. This response indicates just how much people are excited about this company.
What Made Investors So Excited?
Let’s break down what happened on the first day of bidding.
Retail investors (that’s you and me, normal folks) were the most enthusiastic. They subscribed 7.39 times more than the available amount for them. That is for each share set aside for retail investors, over 7 individuals were willing to purchase it.
Non-institutional investors (rich individuals and organizations) also came aboard with 4.37 times subscription. Even the large institutional buyers were interested with 1.37 times subscription.
The numbers are pretty impressive when you look at them:
- Total bids received: 33.45 crore shares
- Shares actually available: 10.15 crore shares
- Overall subscription: 3.29 times
The IPO Details You Should Know
Urban Company established their price band of Rs 98 to Rs 103 per share. If you wanted to invest as a retail investor, you had to purchase at least 145 shares, which would cost you approximately Rs 14,935 at the maximum price.
The company is raising this money through a mix of:
- Fresh equity shares worth Rs 472 crore
- Offer for sale of existing shares worth Rs 1,428 crore
Even before the public offering began, Urban Company had raised Rs 854 crore from anchor investors. Such big guns as Nomura, Government Pension Fund Global, and a few Indian mutual funds invested in this round.
What’s the Grey Market Saying?
Here’s the interesting part. In the unofficial “grey market” (where individuals exchange shares before they’re formally listed), Urban Company shares are being exchanged at a Rs 35-38 premium.
This is to say that individuals anticipate the shares listing at about Rs 138-141, which would be roughly 35-37% above the highest IPO price. Keep in mind, however, that this is only an approximation and the listing price could turn out quite differently.
About Urban Company: Why Investors Are Interested
For those who may not be aware, Urban Company is that app you more than likely have on your phone for scheduling home services. Need a haircut at home? Cleaning of your house? AC services? That’s Urban Company.
The company operates in India’s Rs 60 billion home services market, which is still largely unorganized. They’ve built a platform that connects customers with service professionals, making it easier for everyone.
What’s impressive about their business is that 84% of their revenue comes from repeat customers. This shows people like their service and keep coming back.
The Financial Numbers Look Good Too
Urban Company’s recent financial performance has been encouraging:
- Revenue of Rs 1,144 crore in FY25 – up 38% from the previous year
- Net profit of Rs 240 crore – they’ve turned profitable
- Strong customer retention and growing business
The company plans to use the IPO money for expanding operations, improving technology, and marketing activities.
When Will It List?
If you’re planning to invest or just curious about when you can see how the shares perform, here are the important dates:
- Subscription window: September 10-12 (closes today!)
- Share allotment: Expected September 15
- Listing date: Expected September 17 on BSE and NSE
What Do Experts Think?
Most brokerages are giving positive recommendations for this IPO. Anand Rathi has given it a “Subscribe for Long Term” rating. However, some experts are calling it “fully priced,” which means they think it’s fairly valued but not exactly cheap.
At the upper price band, the company is valued at roughly Rs 14,790 crore.
Should You Consider It?
The high subscription figures indicate there’s certainly demand from all kinds of investors. It has a good business model, increasing revenue, and is in a big market with plenty of potential.
It’s not without risks, though, like any investment. The grey market premium indicates investors expect to see good listing profits, but outcomes are uncertain. The company is also priced rather expensively relative to its current profits.
The Bottom Line
Urban Company’s IPO has obviously resonated with investors. The 3x day one subscription indicates faith in the future of the company. Whether you’re considering investing or merely keeping tabs on the markets, this IPO is certainly worth watching.
India’s home services market is enormous and continues to expand. If Urban Company is able to keep growing their reach and keeping customers happy, this might be a compelling story to watch over the next few years.
Learn More:
- How to Start Investing in Mutual Funds in India – Step-by-Step Process for Beginners
- Difference Between Mutual Funds and Stocks – Which is Better for Beginners?
- Understanding NAV (Net Asset Value) in Mutual Funds – What It Means and Why It Matters
- Risks Involved in Mutual Fund Investments – Common Risks and How to Manage Them
Remember, this article is for informational purposes only and not investment advice. Always do your own research and consult with a financial advisor before making investment decisions.
