Urban Company, the app-based beauty and home services platform, was poised for a robust stock market debut as its shares were trading at over a 50% premium in the unofficial grey market before the listing. The company’s Rs 1,900 crore initial public offering (IPO), which closed recently, received an overwhelming response, drawing subscriptions 103.63 times the issue size.
The company had already raised Rs 854 crore from marquee anchor investors such as SBI Funds, Monetary Authority of Singapore, HDFC MF, Fidelity Securities, Nomura, ICICI Prudential Life, SBI Life, Citigroup, and Goldman Sachs. Shivani Nyati, Head of Wealth at Swastika Investmart, said those who received Urban Company’s share allotment in the IPO would consider booking partial profit and holding the rest for long-term gains with a stop loss of Rs 120.
The conservative approach comes amid a few analysts calling the issue expensive and raising concerns given the company had reported net losses and negative operating cash flows in the past. Further, poor performance of many stocks after a record-breaking debut in recent years could raise concerns among investors.