Urban Company IPO: 57.5% Listing Gains After 103x Subscription – What Should Investors Do Now?

Urban Company delivered one of the most-awaited debuts of the year, listing at ₹162.25 per share on NSE, a 57.5% premium over its issue price of ₹103. The IPO had already created strong buzz with a 103.63x subscription, largely driven by institutional investors, and retail investors too showed robust participation. The strong opening validates the high demand, but the future story will depend on fundamentals. While Urban Company enjoys market leadership, strong customer trust, and improving profit margins, its overall profitability remains unstable, with heavy reliance on tax credits and pressure from a fragmented services market. Investors must balance the excitement of listing gains with the reality that valuations are demanding and sustainable profits will be the true test going forward.

IPO Overview

• IPO Date: September 10 to September 12, 2025
• Total Issue Size: ₹1,900 crore
• Price Band: ₹98 to ₹103 per share
• Lot Size: 145 Shares
• Tentative Allotment Date: September 15, 2025.
• Listing Date: September 17, 2025. Check Urban Company's live share price here.
• Subscription Status: The Urban Company IPO subscriptions closed at 103.63x.

How Does Urban Company Make Money?

Urban Company is basically an app and website where you can book trained professionals for services like beauty treatments, spa, cleaning, pest control, plumbing, painting, or even repairing your fridge. Think of it like Swiggy or Zomato, but for home and beauty services instead of food. It has three main ways of making money, including charging platform service fees when customers book services, selling kits or products (like wax, shampoos, cleaning liquids, tools) to the service professionals, and direct sales to customers through its Native brand devices, such as water purifiers and smart locks.

So Urban Company earns whenever you book a service and even when its professionals buy products to provide those services.

Objectives of the IPO

From the fresh issue of ₹472 crore, the money will go here:

• ₹190 crore to build new tech and cloud systems (₹60 crore just for cloud).
• ₹75 crore for office leases.
• ₹90 crore for marketing to attract more customers.
• Up to 25% of the balance funds for general business use.

A significant, ₹1,428 crore (75% of IPO size) will go to early investors cashing out, not into the company.

Strengths:

• India’s largest online platform for home services, operating in 51 cities with 7 million+ customers.
• Trusted consumer brand with 4.79/5 average service rating.
• Strong gig worker economics,  service partners on the platform earned 30-40% more than others in FY25.
• Revenue jumped 38% YoY to ₹1,144 crore in FY25, showing growth across all segments.
• Cost efficiency is improving,  EBITDA margin turned positive at 1.1% in FY25 and further improved to 5.7% in Q1 FY26.

Risks:

• Profitability isn’t fully stable. FY25 net profit of ₹239 crore was inflated by ₹211 crore deferred tax credit. Without it, true profit was just ₹28.5 crore.
• Q1 FY26 profit crashed 55% YoY to ₹5.6 crore (excluding tax gain).
• 75% of IPO is OFS - company itself gets only a small fraction of proceeds.
• Highly fragmented and competitive industry with less than 1% online penetration - consumers still largely use local offline service providers.

For detailed information, visit Urban Company’s IPO page.

IPO Valuation

• Market Cap Post-IPO: ₹14,790 crore
• EV/Revenue: 12.45 times
• P/E Ratio: 66x

As per our calculations, Urban Company’s IPO pegs its post-issue market cap at ₹14,790 crore. On revenue multiples, it is being priced at an EV/Revenue of 12.45x (post-IPO) against 12.04x pre-issue, which is clearly on the richer side for a business still in the early stages of scaling profitability. On earnings, the stock seeks a P/E of 66x post-IPO, compared to 62.5x pre-IPO, which essentially means investors are paying ₹66 today for every ₹1 of annual profit. This is high compared to the broader market and even premium consumer internet players in India, but the company is positioning itself as a unique, category-defining platform. The argument from management and lead bankers is that Urban Company’s full-stack, tech-driven model, combined with improving operating metrics, deserves a premium, but the valuation undeniably leaves a limited margin of safety.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

Who’s Leading Urban Company?

Urban Company was founded in 2014 by Abhiraj Singh Bhal, Raghav Chandra, and Varun Khaitan, three IIT alumni who wanted to professionalize India’s fragmented local services market. Today, they still hold nearly 20% combined stake.

Abhiraj Singh Bhal (CEO & MD) leads strategy and company vision. Under his leadership, UC expanded to the UAE and Singapore and is now a household brand in India’s metros. CTO & Product Head, Raghav Chandra, is a tech mind with stints at Twitter (now X) before Urban Company. Known for embedding deep tech automation into the business. He was featured in Forbes 30 under 30. While Varun Khaitan, the COO, handles day-to-day operations. His focus has been on scaling service delivery and keeping Indian consumer services profitable.

Apart from the founders, the board has strong names like Rajesh Gopinathan (ex-TCS CEO), Ireena Vittal (strategy expert), and Ashish Gupta (VC veteran), showing maturity in governance.

Industry Outlook

India’s home services market is huge at $60 billion (₹5.28 lakh crore) in FY25, set to touch $100 billion by FY30 (10, 11% CAGR). But the online part is less than 1% today, meaning massive room for growth. Rising urban incomes, nuclear families, and busier lifestyles will drive demand for reliable platforms like Urban Company. However, it remains a market where offline competition is strong, and brand trust will be key.

Who’s Making Money via the IPO OFS: Selling Shareholders

A key element in Urban Company’s IPO structure is the significant OFS portion of ₹1,428 crore, where early investors are partially exiting. This does not bring fresh funds for the company but allows existing shareholders to unlock their investments.

Accel India IV (Mauritius) Limited is selling shares worth ₹390 crore, booking a 27.3x return on its investment, Bessemer India Capital Holdings II Ltd is cashing out ₹173 crore, translating into a 14.4x return, while Elevation Capital V Limited will exit ₹346 crore worth of shares, making 19.1x returns. Tiger Global’s Internet Fund V Pte. Ltd. is selling ₹303 crore worth of holdings but with a modest 1.7x multiple and VYC11 Limited joins with a ₹216 crore sell-off, netting out a 5x return.

These numbers highlight that while some early backers are making blockbuster gains, others are taking more modest exits, reflecting varied investment cycles and entry valuations. More importantly, the heavy OFS tilt means investors should note that three-fourths of this IPO proceeds are going out to selling funds rather than fueling Urban Company’s growth plans.

Analyst View

Urban Company made a strong market debut, listing at ₹162.25 on NSE - up 57.5% from its IPO price of ₹103. This sharp listing gain shows that the strong demand was not just on paper but also translated into investor sentiment on the first trading day. The IPO itself was subscribed 103.63 times overall, led by institutional investors with very high participation.

Now the question is - what next? For those who invested in the IPO, this successful debut has already rewarded them with healthy gains. But for anyone thinking long term, the picture is mixed. On the positive side, Urban Company is India’s largest home services platform, growing revenues fast, turning EBITDA margins positive, and steadily improving cost structure. However, profitability is still thin, with net profit relying heavily on tax credits, and the first quarter of FY26 already showing a sharp drop in YoY profit.

With 75% of proceeds going to early investors via the OFS, the company itself receives only limited fresh capital, so execution and growth will be key. Short-term traders may view listing gains as an opportunity, while long-term investors should carefully weigh valuations against the risks of unstable profitability and tough competition in the services market.

How to Apply for an IPO on INDmoney?

1. Download the INDmoney app and complete your KYC.
2. Go to INDstocks → IPO, or just search “IPO”.
3. Tap on an IPO from the list of live IPOs.
4. View key details like price band, lot size, and dates.
5. Tap Apply Now and choose the number of lots.
6. Use INDpay UPI for instant mandate tracking.
7. Your funds will be blocked until the share allotment is finalized.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Urban Company's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.