IPO listed on 17 Sep'25
Urban Company Ltd
Minimum Investment
₹ 14,935 / 145 shares
Issue price
₹ 103
Listing price
₹ 162
Listing day %
62%
Listing on
Sep 17, 2025
Our Verdict:
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- Urban Company Ltd (UCL) has shown strong topline growth and turned adjusted EBITDA-positive in FY25, although consolidated margins remain thin due to challenges in international markets and its ‘Native’ brand (water purifiers and electronic door locks).
- While UCL’s India services business is now profitable, international markets (UAE, Singapore and Saudi Arabia) are still far from profitable. However, there’s long-term potential if the firm can replicate its successful India model abroad.
- In terms of valuation, the IPO appears to be fully priced, with a Price-to-Earnings (PE) multiple of 62 based on FY25 earnings.
- With an annual household penetration of 7.8% in the top 200 cities in FY25, UCL has a substantial growth opportunity. This story is more about creating a new market category and building consumer habits, similar to the path taken by Zomato.
- For long-term investors, UCL offers a unique opportunity to participate in the formalization of India’s home-services market. Given these factors, the IPO may be worth subscribing to from a long-term perspective.
About the company
Founded in
22 Dec'14
Managing director
Abhiraj Singh Bhal
- UCL is a comprehensive tech-enabled marketplace offering beauty & wellness, cleaning and appliance repair services. Unlike gig aggregators, it manages a marketplace with trained, certified professionals equipped with branded kits and standardized pricing, ensuring consistent quality and trust.
- UCL operates in three segments: (i) India Consumer Services; (ii) International Business; and (iii) Native Products (water purifiers and electronic door locks). By Q1 FY26, UCL was active in 51 Indian cities and 3 international markets (UAE, Saudi Arabia, Singapore), serving 7.02 million customers with 54,347 monthly active professionals.
STRENGTHS
- Financial Performance: UCL achieved a robust 34% CAGR in operating revenue from FY23 to FY25. The company became profitable in FY25, posting a net profit of Rs 239.76 crore, reversing a loss of Rs 92.77 crore in FY24.
- Cash Efficiency: UCL generated an operating cash flow of Rs 54.6 crore in FY25, surpassing the reported EBITDA. By leveraging upfront customer payments and deferred partner payouts, it benefits from a working-capital advantage, which is uncommon in new-age consumer-tech businesses and enhances financial resilience.
- Customer Stickiness: UCL excels in fostering habit-driven consumption, with 82% of FY25's Net Transaction Value (NTV) from repeat transactions. Average customer spend rose to Rs 4,079 in FY25 from Rs 3,786 in FY23. This growing spend per cohort strengthens long-term value. The firm has built a defensible moat, with an impressive 4.8 out of 5 customer satisfaction rating.
RISK FACTORS
- Profitability Concerns: UCL has experienced operating losses, net losses and negative operating cash flows in the past. If it fails to achieve sufficient revenue growth and improve cost-efficiency, it may struggle to generate positive operating cash flows and sustain profitability.
- Competitive Pressure: UCL faces strong competition from traditional offline players, particularly with low online service penetration in some of the markets it serves. This could lead to reduced demand for its platform or fewer service professionals joining, negatively impacting both revenues and costs.
- Limited Operating History in New Segments: UCL has limited experience in some business lines, including products under its Native brand, InstaHelp, small home projects, wall panel services for home décor and cleaning subscription services. Thus, risks such as operational challenges, slower market adoption and uncertainty around the scalability and profitability of these new offerings persist.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 1,900 crore
Fresh Issue
₹ 472 crore
OFS
₹ 1,428 crore
Price range
₹ 98 - 103
Lot size
145 shares
Issue Objective
- The net proceeds from the fresh issue will be used for the following purposes:
- Development of new technology and cloud infrastructure;
- Lease payments for office spaces;
- Marketing and promotional activities; and
- General corporate purposes
Dates
Bidding open
10 Sep'25
Bidding close
12 Sep'25
Allotment date
15 Sep'25
Refund date
16 Sep'25
Listing
17 Sep'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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