IPO-bound Urban Company has neared the conclusion of its three-day IPO. The IPO saw oversubscription - enabled by retail, FIIs and even institutional investors.
But the big question among investors would be - what would be the price that the stock would list at. While price bands for the IPO were set at Rs 98 - 103; the listing price may vary.
There is still no consensus on how much Urban Company would list at, however stocks trading in the Grey market were commanding a premium of 43 over the top-ceiling of the price band. That is in a range of Rs 146-150.
While an upside in grey market maybe a common trend to spot, it is not necessary for the trend to follow to listing-day. In fact, a research report from Deven Choksey that recommended a "Subscribe" had shown PE at multiples of 61.7x. While Urban Company operates in the area of ecommerce, the PE multiples are lower compared to those of its peers such as Eureka Forbes (70.8), Eternal (597.9), and diagnostic services businesses evaluated by the agency.
Many brokerage agencies and analysts had also attributed a Red Seer Consulting report that found service professionals on an average earning 30-40% more with Urban Company. Many of these agencies had hence recommended subscribing to the report. SBI Securities and Ventura Securities too had recommended a 'Subscribe' citing similar reasons.
The IPO of the Gurugram based home-services and beauty-services provider that started on September 10th is estimated to raise ₹472 crores from fresh issue of shares. The total value is estimated at ₹1,900 crores - ₹1,428 crores from OFS (Offer For Sale) by existing shareholders.
While there are no exact answers on how much the Urban Company stock would sizzle, in the past one has seen several such IPO listing successes. Winsol Engineers was available at a subscription of Rs 75, but on listing day it settled at Rs 383.25 making a three-digit percent gain. Then there have been examples such as Chemcon Specialty, Route Mobile, Burger King India, Nazara Technologies, Bectors Food Specialties etc.
In fact, peers such as Swiggy and Zomato too made gains on listing day. Swiggy made a modest Rs 30 per stock, and Eternal commanded Rs 40 more than its issue price. That, on their respective listing days.
As regards subscription status, the IPO was subscribed 85.46x - QIB was higher at 107.73 while retail issue was subscribed 37.48x and Non-Intuitional buyers bid 73.38x.
