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IPO Details

• IPO opening: 10-09-2025
• Closing: 12-09-2025
• IPO Size: Rs 1,900 crore Fresh Issue: Rs 472 crore Offer For Sale (OFS): Rs 1,428 crore IPO
• Price Band: Rs 98-103 per share
• Minimum Bid Lot: 145 shares
• Investor Allocation: QIBs 75%, NII 15%, Retail 10%
• Lead Managers: Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, Goldman Sachs (India) Securities Private Limited, JM Financial Limited
• Registrar: MUFG Intime India Private Limited

About the Company

• Urban Company operates a technology-driven, full-stack online marketplace for quality-driven services and solutions across various home and beauty categories. The platform enables consumers to order services such as cleaning, pest control, skincare, massage, appliance repair, and handyman services, delivered by trained independent service professionals.
• The company offers its services across 51 cities in India, the United Arab Emirates, and Singapore, with operations in Saudi Arabia conducted through a joint venture. Under its ‘Native’ brand, Urban Company sells smart water purifiers and smart electronic door locks, and it has also launched an on-demand home-help service called ‘InstaHelp’.
• The company is promoted by Abhiraj S Bhal, Raghav Chandra, and Varun Khaitan. As of June 30, 2025, it has established a presence in 47 cities in India. The company does not explicitly mention manufacturing units, focusing on its marketplace model for services. The total number of employees is not specified, but ESOPs are considered a strong retention and motivation tool for its employee base.

Financials

Consolidated figures (Rs. Cr)

Post IPO Market cap: Rs 14,790 crore ; Market cap/ sales (FY25): 12.92x

Observation on results: Revenue has shown consistent growth over the past three fiscal years. Operating losses have significantly reduced, moving towards a near-breakeven operating performance. The positive net profit in FY25 is due to deferred tax credit and other income, rather than core operating profitability.

Anchor Issue

Urban Company raised a total of ₹854 crore from its anchor investor round by allocating 8 to 59 anchor investors. The top 10 anchor investors by allocation include: SBI Innovative Opportunities Fund (2.34%), SBI Midcap Fund (2.93%), Government of Singapore (0.82%), Monetary Authority of Singapore (0.59%), ICICI Prudential Bharat Consumption Fund (3.51%), ICICI Prudential Exports and Services Fund (1.17%), Goldman Sachs Funds – India Equity Portfolio, Nippon India Small Cap Fund, Aditya Birla Sun Life Mutual Fund, and Nomura Funds Ireland, each holding a significant share.

Other anchor investors span a mix of global pension funds, sovereign funds, and prominent insurance and asset management companies, including Amundi Funds, Theleme India Master Fund, Allspring Global Investments, Florida Retirement System, Helios Mutual Fund, CitiGroup Global, UTI, GIC Singapore, Bajaj Allianz, Steadview Capital, and WhiteOak etc. A total of 36.96% of the anchor allocation was allotted to mutual funds across 29 schemes.

Salient points

• Use of funds: The fresh issue proceeds of Rs 472 crore are proposed to be utilized for funding new technology development and cloud infrastructure (Rs 190 crore), lease payments for offices (Rs 75 crore), marketing activities (Rs 90 crore), and the balance for general corporate purposes.
• Business scenario: The home services market in India is estimated to be Rs 5,100–5,210 billion in FY25, with a projected growth at a CAGR of 10–11% to reach Rs 8,400–8,580 billion by FY30. Less than 1% of this market is currently organized and online, indicating a significant growth opportunity for the company.
• Business Verticals: The company operates through three primary business verticals: India consumer services, Native branded products, and International business. It has also launched new offerings like ‘InstaHelp’.
• Revenue Model: Revenue is primarily generated from platform services provided to customers, the sale of products to service professionals for use, and the sale of ‘Native’ brand products (water purifiers and electronic door locks) to customers.
• Growth Strategies: Strategies include deepening market penetration in existing cities by enhancing consumer experience, introducing more service categories in existing micro markets, and investing in brand marketing. The company also plans geographic expansion in India, targeting over 200 cities by FY30, and continued growth in its international markets (UAE, Singapore, and Saudi Arabia JV).
• Risks: The company has incurred net losses and negative operating cash flows historically. There are concerns regarding aggressive pricing of the IPO and the substantial OFS.
• Litigations: There are 41 material civil litigations against the company, with an aggregate amount involved of Rs 536.65 million.
• Revenue split by region: In FY25, approximately 77% of revenue came from the India consumer services segment (including services and product sales), 12.8% from international business, and 10.1% from ‘Native’ brand product sales.
• CAGR Revenues last 3 years: Revenue from operations grew at a CAGR of 34.1% over FY23-FY25.

Management commentary

The company’s management states that Urban Company is debt-free with a strong balance sheet, and the IPO’s fresh issue is for future growth investments in technology, training, and marketing. Their primary focus is any service that can be delivered within the four walls of a home, with plans for calibrated expansion to maintain quality. In FY25, the contribution margin was 56% of net revenue, and the top-line grew from Rs 437.6 crore in FY22 to Rs 1,144.5 crore in FY25. Adjusted EBITDA turned positive at Rs 12 crore, and profit before tax was Rs 28 crore, indicating a break-even stage. The company prioritizes offering value over deep discounts, and marketing expenses have remained flat despite topline growth. There is some business seasonality, with upticks during summer (AC/refrigerator services) and around Diwali/wedding season (cleaning/beauty services). Expansion strategies include deepening penetration in existing 47 Indian cities, expanding service categories, and growing the international business in UAE and Singapore towards profitability. The Native brand also grew over 3x year-on-year in Q1FY26. ESOPs are considered a real expense and a retention tool for employees, with no ESOP charges for founders. The core services business in India is profitable at about a 10% EBITDA margin.

Opinion

I will apply for this IPO. Urban Company operates in a large and growing unorganized market with significant long-term potential, while the IPO pricing appears aggressive, with expected growth of 30%, it may be worthy of a medium to long term investment and even going by current GMP it may list at a moderate premium.

• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.