Highlights: Urban Company IPO GMP cools off ahead of listing ?

The GMP of the Urban Company IPO is surging ahead of the allotment being finalised later today. There is lot of interets in the IPO ahead of its listing and it is clearly borne out by the fact that the Urban Company IPO subscribed 108.98x. The retail category alone was subscribed 41.49x.

The grey market is buzzing ahead of Urban Company’s IPO listing. According to data from investorgain.com, shares are commanding a premium of Rs 64 in the unofficial market. This puts the expected listing price at nearly Rs 167 per share, against the issue price of Rs 103.

Anand Rathi Research said that the company is seeking a valuation at a P/E of 65.7x at the upper price band to its FY25 earnings, which the brokerage finds fully priced. The company has a price to sales of 12.9 and a market cap of Rs 14,789.5 crore post issue of equity shares.

“We believe that the IPO is fully priced and recommend a ‘Subscribe- Long Term’ rating to the IPO,” said Anand Rathi Research in an IPO note.

The share allotment is expected to be finalised today, September 15, after which successful bidders will see shares credited to their Demat accounts.

The company’s stock is slated to list on the BSE and NSE on September 17, marking its official market debut. The issue is being managed by Kotak Mahindra Capital as the lead manager, while MUFG Intime India is the registrar handling the allotment process.

“Urban Company’s initial issue is priced at 12.4x TTM EV/Sales, which appears higher compared to its listed peers in the food service category. Moreover, we have compared the company’s financial performance with other service companies (not directly comparable) and believe its issue to be fairly priced. We believe the company is well-positioned to capitalize on the growth driven by expanding consumer segments and shifting preferences towards higher spends on experiences. We assign a “SUBSCRIBE” rating to its initial issue,” said Deven Choksey research.

Investors can also check their Urban Company IPO allotment directly on the MUFG Intime website. From the company dropdown, select Urban Company IPO, and then provide one of the following details – PAN, Application Number, DP ID/Client ID, or Bank Account Number. After entering the details, click Search to view your allotment status.

Another way to track your Urban Company IPO allotment is through the NSE IPO application tracking page. Select Equity and SME IPO Bid Details, choose Urban Company IPO from the list, and then enter your Application Number and PAN. Once you hit Submit, your allotment status will be displayed on the screen.

If you applied for the Urban Company IPO, you can easily check whether you got shares through the BSE website.

Just head to the IPO allotment page, select Equity as the issue type, and choose Urban Company IPO from the dropdown menu. Then enter your Application Number or PAN, fill in the captcha, and hit Search to see your allotment status.

Also Read: Urban Company IPO allotment status today: Step-by-step guide to check on BSE, NSE, MUFG Intime

Urban Company has laid out a clear plan for the money raised from its IPO. About Rs 190 crore will go into building new technologies and cloud infrastructure, while Rs 75 crore is earmarked for office leases.

The company also plans to spend Rs 90 crore on marketing initiatives to strengthen its brand presence. The balance amount will be directed towards general corporate purposes.

Urban Company has raised Rs 854 crore from anchor investors on September 9, just before opening its IPO. The company allotted a little over 8.29 crore shares at Rs 103 each in this round.

The anchor book saw participation from 29 mutual fund schemes across 13 fund houses, along with several global and domestic institutions. Among the big names were Nomura, Aditya Birla Sun Life, UTI, Government Pension Fund Global, ICICI Prudential Life, SBI Life, Bajaj Allianz, CitiGroup Global, Helios Mutual Fund, Florida Retirement System, and Goldman Sachs.

The Urban Company IPO allotment is likely to be finalised today. The GMP has shot up 66% and the investors are looking forward to a listing day pop. However, we must remind readers that the GMP is an unofficial indicator of the price movement, and the actual listing price could be very different from the GMP.

Nevertheless a higher GMP is generally associated with high interest in the IPO and possible listing day gains.

Urban Company has reported a sharp turnaround in its financials for FY25. In the first nine months, the home services platform posted an operating revenue of Rs 846 crore and a net profit of Rs 242 crore.

This is a big shift from the same period in FY24, when it had recorded a net loss of Rs 58 crore. The company has also widened its footprint, now serving customers in 51 Indian cities along with international markets such as the UAE and Singapore.

Ahead of its listing, Urban Company’s shares are active in the unlisted market. The stock is trading at Rs 171.5 per share in the grey market, which is about 66.50% higher than the IPO’s upper price band of Rs 103.

The Urban Company IPO was open for investors from September 10 to September 12. With the bidding process now closed, the next step will be the allotment of shares.

According to the schedule, refunds for those who do not receive shares will begin on September 16, and successful bidders will see shares credited to their Demat accounts on the same day.

SBI Securities brokerage reports see potential for long-term investors. According to the brokerage house IPO note, “UCL provides a range of household services, catering to 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 breakeven 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.

The Urban Company IPO saw a massive rush of investors. The issue was subscribed nearly 109 times in total. Against 10.15 crore shares on offer, the IPO received bids for over 110.6 crore shares.

Qualified Institutional Buyers (QIBs) led the way with bids 147.35 times their allotted quota. Non-Institutional Investors (NIIs) followed, subscribing 77.82 times. Retail investors also showed strong interest, with their portion subscribed 41.5 times.