Urban Company shares rally 69% from IPO issue price on day 2 of trading. Time to cash out or double down?

THE ECONOMIC TIMES

Shares of Urban Company surged as much as 4% on Thursday to Rs 174 on the BSE, taking gains to nearly 69% over its IPO issue price of Rs 103, in just two days of trade. The sharp rally has left investors weighing whether to book profits after the blockbuster listing or stay invested for the long haul.

The stock listed on Wednesday at Rs 162.25 on the NSE, a premium of 57.52% to its issue price, before settling at Rs 166.83, up 61.97%. On Thursday, it extended gains to Rs 174.

The Rs 1,900-crore initial public offering, priced at Rs 98–103 per share, drew overwhelming demand with a subscription of 103.63 times. The qualified institutional buyers’ portion was subscribed 140.20 times, the non-institutional investors’ segment 74.04 times, and the retail tranche 39.25 times.

The IPO comprised a fresh issue of Rs 472 crore and an offer for sale of Rs 1,428 crore, with early backers such as Elevation Capital, Accel India, Bessemer India Capital, Internet Fund V, VYC11 and Tiger Global trimming stakes.

Ahead of the issue, the company had raised Rs 854 crore from anchor investors including Government Pension Fund Global, Fidelity Funds, Florida Retirement System, Amundi Funds, SBI Mutual Fund, ICICI Prudential Mutual Fund, Nippon India MF, and several insurance players.

Business momentum

Urban Company, formerly known as UrbanClap, runs a technology-driven marketplace offering home and beauty services such as cleaning, plumbing, carpentry, appliance repairs, grooming and massage therapy. The company also operates in the UAE, Singapore and Saudi Arabia.

It recently turned profitable, reporting a net profit of Rs 240 crore in FY25 compared with a loss of Rs 93 crore in the previous year. Revenue climbed 36% to Rs 1,261 crore.

What analysts say

“For those who received allotment, consider booking partial profit and hold rest for long-term gains with a stop loss of Rs 120,” said Shivani Nyati, Head of Wealth at Swastika Investmart.

Short term investors can look to exit with listing gains, said Gaurav Garg from Lemonn Markets Desk, adding that long term investors can hold and wait for attractive prices to accumulate more.

While valuations appear stretched in the near term, analysts highlight the company’s dominant position in India’s largely unorganised Rs 6,000 crore home services market and its ability to scale new categories as reasons for optimism.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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