Urban Company shares are expected to list at a strong premium on Wednesday, September 17, according to the current grey market trends.
The initial public offering (IPO), which was open for subscription from September 10-12, received an overwhelming response, with 103.63 times bids. Analysts said the robust participation indicates confidence in the company’s long-term growth prospects.
According to platforms tracking grey market activities, Urban Company shares are commanding a premium of over 52 percent. Investorgain quoted a grey market premium (GMP) of Rs 54, implying a listing gain of 52.43 percent over the upper price band of Rs 103 per share. The IPO was priced in the range of Rs 98-103 per share.
Narendra Solanki, Head of Fundamental Research, Investment Services at Anand Rathi Shares and Stock Brokers, said Urban Company has established itself as a technology-driven services marketplace across home and beauty categories.
"In recent years, the company has forayed into home solutions with ‘Native’ water purifiers and electronic door locks, and scaled up its InstaHelp home-assistance service. While micro markets have declined due to consolidation, household penetration in the top 200 cities stood at 7.8 per cent in FY25, underlining long-term potential. At the upper end of the price band, the issue values the company at a P/E of 65.7x and P/S of 12.9, translating to a market capitalisation of Rs 14,789.5 crore post equity dilution. Investors may consider holding the stock from a long-term perspective, depending on their risk appetite," Solanki noted.
Mehta Equities also maintained a cautious but positive stance on the stock.
"Given the strong subscription and prevailing market sentiment, we expect listing gains in the range of 40-50 percent or higher, depending on conditions on listing day. Beyond the immediate upside, Urban Company represents a structural long-term story in the home services segment. We advise allotted investors to hold the stock, while non-allottees should adopt a ‘wait and watch’ approach to evaluate potential post-listing opportunities," said Prashanth Tapse, Senior Vice-President (Research) at Mehta Equities.
The company said proceeds from the fresh issue will be utilised for technology development and cloud infrastructure, lease rentals for offices, marketing expenses, and general corporate purposes.
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