Since its listing on September 17, Urban Company shares have rallied 86% over the issue price of Rs 103.
The stock was listed on Wednesday at Rs 162.25 on the NSE, a premium of 57.52% to its issue price, before settling at Rs 166.83, up 61.97%. On Thursday, it extended gains to Rs 174.
Prashanth Tapse, Senior Vice President (Research) at Mehta Equities, calls Urban Company a compelling long-term structural story which can serve as a proxy for the growing demand in the home services segment across its key geographies.
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It is the only organised player in the tech-driven online home services marketplace, enjoying a leadership position across 51 cities in India, as well as in international markets like the UAE and Singapore.Mehta said that he was not surprised by the stellar listing of Urban Company. He added that despite being perceived as an expensive IPO from a valuation standpoint, the offer witnessed robust investor demand, which is “well supported from a long-term investment perspective.”Tapse further advised that “We continue to recommend allotted investors who can take near-term risk to HOLD the stock from a long-term investment perspective, keeping in mind the inherent market risks. For non-allotted investors, a ‘Wait and Watch’ approach is advisable to assess any post-listing dip as a potential entry point.”
Its strong brand recall and first-mover advantage position it as a preferred service provider in a largely fragmented sector.
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