Urban Company‘s 19-billion-rupee ($216 million) IPO was fully subscribed within two hours of launch on Wednesday, as retail investors thronged to grab a piece of India’s burgeoning online home services market.
Indian startups, such as e-tailers Lenskart and Meesho are also looking to list their shares in the world’s second-largest IPO market and cash-in on growing demand and rising household incomes.
The country’s IPO market, which had a slow start this year has since gained pace with over 198 companies having raised 808.27 billion rupees so far, per LSEG data.
Urban Company‘s IPO was subscribed nearly 2.5 times with retail investors’ portion, only 18% of the offering, subscribed six times, as of 3:21 p.m. IST. Institutional buyers subscribed 83% of the54.4%set for them, while the remaining offering for non-institutional investors was subscribed 3.3 times.
The issue will close on September 12 and the stock will start trading on September 17.
Prashant Tapse, senior vice president of research at Mehta Equities, said that Urban company has the first-mover advantage in a largely untapped market.
The Gurugram-based company offers services ranging from spas to plumbing repairs and turned a profit last year with a revenue of 11.44 billion rupees.
“Online penetration in this sector (home services) remains under 1%, which bodes well for the company to capitalise on substantial growth penetration in formalising household services,” said Tapse.
The company raised 8.54 billion rupees from marquee investors, including SBI Life Insurance and ICICI Prudential Life Insurance, on Tuesday in the IPO‘s anchor round.
