After delivering the most subscribed initial public offering (IPO) of the year, Urban Company, the biggest home services platform in India, surged onto the public markets on Wednesday, opening 58% above its issue price.
The Gurugram-based company, which links customers to at-home services including appliance repair and beauty treatments, made its debut on the National Stock Exchange in Mumbai at ₹162.25 per share, or around $1.84, up from its IPO issue price of ₹103. Investors made orders for 100 times more shares than were available when the offering opened last week, indicating strong interest from both institutional and retail investors.
For its early supporters, the public offering of Urban Company has also provided a partial exit opportunity; Accel has reaped the most rewards, followed by Elevation Capital and Tiger Global. With an entry price of ₹5.39 per share, Elevation stands to make almost 30 times, Tiger Global is looking at relatively modest gains, allegedly around 1.3 times its cost base, while Accel, which invested at an average cost of ₹3.61 per share, is sitting on potential profits of nearly 45x.
The ability of Urban Company to arrange for previously disorganized domestic services in India, such as cleaning, plumbing, electrical repair, massage, and beauty treatments, has been a major factor in the company’s growth during the last ten years. In an unstandardized sector, the company has established an on-demand platform by digitizing these offerings through its app. As the biggest organized player in this market, Urban Company enjoys a monopoly-like position in this regard.
Anchor investors Goldman Sachs, Dragoneer Investment Group, Norges Bank, GIC, Nomura Amundi Funds, Steadview Capital, Prosus, and WhiteOak contributed $97 million to Urban Company prior to the start of the $217 million IPO. SBI Mutual Fund, ICICI Prudential, Nippon, and UTI were among the domestic mutual funds that took part in the pre-IPO secondary round.
Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra founded the Urban Company in November 2014 under the name UrbanClap. It currently operates in 59 cities in four countries: India, the United Arab Emirates, Singapore, and Saudi Arabia. To date, India has been its major market. By the conclusion of fiscal year 2030, the company wants to have its residential services available in more than 200 cities.
Urban Company aims to utilize the net proceeds primarily for technology development and cloud infrastructure, along with lease payments for office spaces and marketing initiatives.
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