Urban Company is preparing to make a significant move into the public markets with its initial public offering (IPO), which is anticipated to raise ₹1,900 crore. According to the draft red herring prospectus (DRHP), this financial exercise includes a fresh issue of shares worth ₹429 crore, alongside an offer for sale by existing shareholders totaling ₹1,471 crore.
The company's co-founders, Abhiraj Singh Bhal, Raghav Chandra, and Varun Khaitan, are not participating in the sale of their stakes in this initial phase. “The founders had already sold shares worth nearly ₹780 crore through secondary transactions leading up to the IPO,” noted industry insiders.
Notable investors like Accel, Tiger Global, and Bessemer Venture Partners will be offloading shares as part of the offering. In terms of distribution, Accel is set to sell a block valued at ₹433 crore, while Elevation Capital plans to sell shares worth ₹346 crore. Tiger Global and Vy Capital are further selling stakes worth ₹303 crore and ₹216 crore, respectively.
The funds raised during this IPO will largely be allocated towards advancing Urban Company's technological capabilities and overall operational needs. Specifically, the company plans to utilize ₹190 crore for new technology developments and cloud infrastructure. “Investing in technology is key to our growth strategy,” said a spokesperson from Urban Company.
In detail, the budget set aside for technology development is estimated at ₹130 crore over the next three fiscal years. This earmarked amount will support the development of multi-category checkout systems and enhanced recommendation systems aimed at improving home improvement and decor solutions. “We want to incorporate Internet of Things (IoT) capabilities into our product offerings,” the spokesperson added, emphasizing the company’s vision for innovation.
Additionally, Urban Company is allocating ₹80 crore for marketing activities and ₹70 crore for office leasing. “Our goal is to expand our market presence and ensure that our operations are well supported,” stated the company in its DRHP.
Urban Company has shown notable financial growth recently. In the first nine months of fiscal year 2025, the company reported an operating revenue of ₹846 crore, representing a remarkable 41% increase from the previous year. More significantly, the company achieved profitability during this timeframe, posting a net profit of ₹242 crore, a turnaround from a loss of ₹58 crore in the corresponding period of 2023.
With an annual customer base of 6.51 million and an average of 48,169 active service professionals engaged each month, Urban Company's growth trajectory appears promising. “This IPO is not just a fundraising measure; it represents our commitment to innovation and improving our service as we expand,” clarified a company official.
As Urban Company transitions into the public space, the outlook remains optimistic. The funds generated through the IPO will enable the company to solidify its technological groundwork, allowing it to compete effectively in the rapidly evolving at-home services market. Stakeholders are observing with keen interest how this next chapter unfolds for the company, and the impact it will have on their operations moving forward.