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Urban Company’s IPO sees nine times oversubscription on the second day, driven by strong retail and high-net-worth investor demand.
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Urban Company, the Gurugram-based home services marketplace, has witnessed massive investor enthusiasm on the second day of its initial public offering (IPO), with overall bids reaching nine times the shares available. This remarkable demand underscores Urban Company’s strong position as one of India’s leading consumer tech startups poised for a robust market debut.
Robust Demand Across Investor Categories
The IPO, which offers a total of 107.7 million shares, received bids for approximately 961 million shares by the end of day two. This enormous oversubscription comes primarily from two investor segments: non-institutional investors, including high-net-worth individuals (HNIs), and retail investors.
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High-Net-Worth Individuals Lead the Charge
Non-institutional investors exhibited exceptional interest, bidding for more than 18 times their allocated shares. Notably, the portion of applications ranging between Rs 2 lakh and Rs 10 lakh was subscribed 19.07 times, highlighting strong confidence among HNIs in the company’s growth prospects.
Retail Investors Show Unprecedented Interest
Retail investors also rushed in enthusiastically, oversubscribing their tranche by 17.68 times. Impressively, the retail portion was fully subscribed within the first hour of the IPO opening on Wednesday, showcasing sustained enthusiasm for consumer-facing internet companies amid recent volatility in startup listings.
Other Investor Segments
- Qualified Institutional Buyers (QIBs): Bids stood at 1.48 times their share allocation, indicating a more measured approach compared to retail and HNI segments.
- Employees: Applied for shares 13.45 times their reserved quota, reflecting strong internal belief in the company’s future.
Company Background and IPO Details
Founded in 2014, Urban Company connects customers with professionals for diverse services including grooming, cleaning, and appliance repair. The IPO, valued at Rs 1,900 crore (approximately $229 million), serves as a critical barometer for investor appetite in India’s consumer technology sector following mixed performances by recent market entrants.
The offering combines a fresh issue of Rs 429 crore and an offer-for-sale (OFS) of Rs 1,471 crore by early investors Accel, Elevation Capital, and Bessemer Venture Partners. These early backers are set to reap multi-bagger returns, potentially up to 28 times their initial investments.
Pre-IPO Anchor Investments
Before opening to the public, Urban Company secured Rs 853.9 crore ($97 million) from anchor investors at the higher end of the price band ranging from Rs 98 to Rs 103 per share. Esteemed global funds such as Goldman Sachs, Dragoneer Investments, Norges Bank, GIC, and Nomura participated in this round, alongside 13 prominent domestic mutual funds including SBI, HDFC, ICICI Prudential, Nippon, and UTI.
Valuation and Listing
At the upper price band, Urban Company’s valuation stands near Rs 14,000 crore ($1.5 billion). The IPO closes on September 12 and is scheduled to list on the stock exchange on September 17, marking a significant milestone for the company and India’s home services segment.
What the Oversubscription Signals for Investors
The overwhelming demand for Urban Company shares, particularly among retail and high-net-worth investors, signals strong confidence in the company’s scalable business model and growth potential within the consumer tech ecosystem. Despite recent fluctuations in startup listings, investor enthusiasm for companies connecting digital platforms to real-world services remains intact.
Moreover, the substantial participation of anchor investors and mutual funds provides additional validation of Urban Company’s market positioning and long-term prospects.
Key Takeaways
- Urban Company’s overall IPO subscription reached 9 times the shares on offer by day two.
- Non-institutional investors applied 18+ times over their allocation; retail investors oversubscribed 17.68 times.
- Qualified Institutional Buyers showed moderate interest with 1.48 times subscription.
- Employees subscribed for 13.45 times their reserved shares.
- The total bid count was approximately 961 million shares against 107.7 million offered.
- Anchor investors included global giants like Goldman Sachs and leading domestic mutual funds.
- IPO valuation is around Rs 14,000 crore ($1.5 billion) at the top price band.
Urban Company’s IPO success offers a positive outlook for India’s consumer tech startups and highlights growing investor appetite for marketplaces that seamlessly integrate digital and offline home services. The upcoming listing on September 17 will be closely watched by market participants eager to gauge this new entrant’s market trajectory.
Source
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