Image source: TICE news
Urban Company’s ₹1,900 crore initial public offering included a fresh issue of 4.58 crore shares worth ₹472 crore and an offer-for-sale of 13.86 crore shares amounting to ₹1,428 crore. The price band was fixed between ₹98 and ₹103 per share. The stock will debut on the BSE and NSE tomorrow, September 17. Investors can check their allotment status on the websites of the BSE, the NSE or through MUFG Intime Highly Subscribe During Offering
Urban Company’s initial public offering showed remarkable demand for its three-day subscription period from September 10 to 12. Data from the NSE indicates that the issue was subscribed 103.63 times overall, and received applications for over 11 billion shares against the 10.67 crore shares on offer. India Pvt. Ltd, the registrar.
Demand from each category of investors was:
- Qualified Institutional Buyers (QIBs): 140.20 times
- Non-Institutional Investors (NIIs): 74.04 times
- Retail Investors: 39.25 times
IPO Overview
The IPO consisted of a fresh issue and an offer for sale. The company raised ₹472 crore from a fresh issue of 4.58 crore shares and ₹1,428 crore from the sale of 13.86 crore shares by existing shareholders through the OFS.
Proceeds from the new share issuance will be utilized for sales, technological developments, office rent, computing power, and other commercial activities.
Grey Market Premium (GMP)
As per investorgain.com and media reports, Urban Company’s unlisted shares are trading at ₹155 each in the grey market, indicating a premium of 50.49% over the IPO’s upper price band of ₹103.
Brokerage View
Brokerages are still optimistic about the company in the long term. In its IPO note, SBI Securities stated Urban Company is in a strong position in the unorganised household services market.
The brokerage said, “UCL provides a range of household services, catering to the requirements of urban consumers. It has a large addressable market currently being catered to by the unorganized industry. Net Transaction Value (NTV)/Revenue for the company has grown at a CAGR of 25.5%/34.1% over FY23-25. Profitability is on an improving trend and is expected to break even at the EBITDA level in FY26E.”
“At the upper band of the issue price, UCL is valued at 12.9x P/S on post-issue capital. We recommend subscribing to the issue with a long-term investment horizon,” added the brokerage in its IPO note.
What’s Next: With the allotment complete and the listing coming on September 17, it is now just a matter of waiting to see how shares of Urban Company perform on debut. Given the strong demand for the IPO shown by heavy oversubscription, along with rising GMP, and above-the-line analyst outlook, I am still expecting the stock to list at a good premium.
