Urban Company soared in its Mumbai trading debut, putting the rent-a-service marketplace on course to have best opening day among major initial public offerings in India this year.
Urban shares jumped as much as 74% to 179 rupees on Wednesday, building on the success of the country’s most oversubscribed major IPO this year. They were up 62% in afternoon trading, putting them on track to have the best first-day rally among all Indian IPOs sized US$100 million or above, according to data compiled by Bloomberg.
“Urban’s success is reflection of demand for consumer technology companies that are increasingly making inroads in people’s lives,” said Astha Jain, an analyst with Hem Securities.
More broadly, Urban’s US$215 million IPO has raised optimism its success will rub off on other Indian startups. A slew of companies — from eyewear retailer Lenskart Solutions to e-commerce retailer Meesho and Walmart Inc-backed PhonePe are preparing to list their shares.
Urban Company Is India's Best Debut This Year
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The IPO attracted deep-pocketed investors such as Prosus NV, the company that’s gone down in investing lore for paying only US$34 million for a 50% stake in Tencent Holdings 24 years ago. Prosus said it more than doubled its stake in Urban ahead of the listing, and is now one of the Indian company’s biggest shareholders.
It’s not just big investors. Count 28-year-old Kalu Singh, who bought 145 Urban shares in the IPO, among those happy with their purchase.
“I feel the stock will do as highlighted by massive demand from investors,” said Singh, who runs a mobile spare parts shop in Rajasthan state’s Jalore district.
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Thanks to India’s abundance of cheap labour, Urban allows users to book many types of service professionals — from hair dressers to fumigators and plumbers — at competitive prices and fast. Its most used service is hiring people in beauty — including waxing, manicures and haircuts — followed by cleaning, according to a preliminary prospectus.
Investor demand for the firm’s shares reflect growing interest for companies benefiting from the country’s millions strong middle-class that seeks on-demand services. Urban is also seen benefiting from India’s move to cut taxes on everyday items as the South Asian nation looks to cushion the economy from US President Donald Trump’s 50% tariffs.
The estimated total addressable market for Urban’s home services stood at US$59 billion last year and is projected to almost double by 2029, according to Urban’s IPO document.
