IPO Spotlight: Urban Company’s Rs 1,900 Crore Leap-Are Investors Ready for the Ride?

Image Source: The ARC

Urban Company, the country's most prominent tech-enabled home and beauty services marketplace, has submitted draft papers to SEBI for highly awaited Rs 1,900 crore IPO. The issue will include a fresh issue of Rs 429 crore and an offer for sale of Rs 1,471 crore by marquee early investors Accel India, Elevation Capital, Tiger Global, Bessemer, and Vy Capital.

Key Highlights

IPO Structure: Out of the entire Rs 1,900 crore, Rs 429 crore will be through new shares and the rest-Rs 1,471 crore-will be from current shareholders selling their shares. The three founders-Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra-who have a combined share of around 21%, aren't selling anything.
Application of Proceeds: Technology and cloud infrastructure is going to be invested in by the company for Rs 190 crore, office lease rentals for Rs 70 crore, marketing for Rs 80 crore, and the balance towards general corporate expenses.
Financial Performance: Urban Company recorded a strong turnaround, with a pre-tax profit of Rs 27 crore in the first nine months of FY25, a dramatic reversal from a loss of Rs 57.8 crore in the same period last year. FY24 revenue jumped 30% to Rs 828 crore, with net losses declining substantially.
Market Presence: With presence in 59 Indian cities, UAE, Singapore, and Saudi Arabia, Urban Company offers a plethora of services-ranging from cleaning and repairs to beauty and wellness-through independent professionals.
Investor Exits: Accel and Elevation Capital, the largest external shareholders, will be exiting at rich valuations, with the sale of Accel's holding alone worth Rs 433 crore.
Bookrunners: Kotak Mahindra Capital, Morgan Stanley, Goldman Sachs, and JM Financial are managing the IPO.