NEW DELHI: The initial public offering (IPO) of Urban Company Limited, a leading tech-enabled platform for home and beauty services, got fully subscribed within hours of opening on Wednesday. The issue received a healthy response from investors on its first day of bidding, with the issue being subscribed 1.07 times overall by noon.
The Rs 1,900 crore offer, which opened for subscription today, saw particularly robust demand from retail individual investors (RIIs), the segment most indicative of widespread public interest. The retail portion was subscribed 3.19 times, signalling strong confidence in the company's growth story and brand equity.
Subscription Snapshot (as of 12:09 PM, Sept 10):
Retail Individual Investors (RIIs): 3.19 times subscribed
Non-Institutional Investors (NIIs): 1.37 times subscribed
Qualified Institutional Buyers (QIBs): 0.20 times subscribed (Typically, QIBs bid on the final day)
Employee Reservation: 2.99 times subscribed
Total Issue: 1.07 times subscribed
The overwhelming response from retail investors underscores the company's strong brand recognition and the public's belief in the formalization of the home services market in India. The portion reserved for the company's employees was also nearly fully subscribed three times over.
Ahead of the IPO, analysts had largely recommended a "Subscribe" rating to the issue. Reports from firms highlighted Urban Company's "first-mover advantage," "full-stack, hyperlocal model," and its path to profitability as key strengths.
"Urban Company offers a unique play on India’s rapidly formalising services economy, backed by strong network effects, hyperlocal execution, and technology-driven scalability," noted one analyst report. The company reported a remarkable turnaround, swinging from a net loss of ₹93 crore in FY24 to a profit of Rs 240 crore in FY25, with revenue growing 38% to Rs 1,144.5 crore.
The IPO consists of a fresh issue of shares worth Rs 472 crore and an offer for sale (OFS) of up to Rs 1,428 crore by existing investors. The price band has been set at Rs 98-103 per share.
The proceeds from the fresh issue are slated to be used for new technology development, cloud infrastructure, lease payments for offices, marketing activities, and general corporate purposes.
The book-running lead managers to the issue are Kotak Mahindra Capital Company, Morgan Stanley India, Goldman Sachs (India) Securities, and JM Financial. The shares are proposed to be listed on both BSE and NSE.
With the QIB portion yet to see major action, subscription numbers are expected to surge significantly on the final day of the offer, which closes on September 12.