From facial to fixing your faucets, Urban Company is the one-stop solution to all your household needs, and the company is now looking at the capital markets. This home solutions play, formerly known as Urban Clap, filed its draft red herring prospectus (DRHP) with the markets regulator, SEBI, in April.
The company is identified as one of India’s highest-searched online home services full-stack platform brands on Google Trends. Since its inception, the platform has facilitated transactions for more than 1 crore unique consumers across all geographies as of December 2024.
Here is everything you need to know about Urban Company IPO-
Urban Company IPO details
Urban Company’s initial public offer (IPO) comprises both a fresh issue and an offer for sale (OFS) by existing shareholders. The total offer size aggregates up to Rs 1,900 crore. Out of which, the fresh issue component is for up to Rs 429 crore, while the OFS component is for up to Rs 1,471 crore.
The offer includes a reservation for eligible employees. This portion is capped at 5% of the post-offer equity share capital, with individual allotments not exceeding Rs 2 lakh (net of employee discount), although under-subscription allows for higher individual allotments up to Rs 5 lakh.
Urban Company may consider a pre-IPO placement of up to Rs 85.8 crore prior to filing the Red Herring Prospectus. If this occurs, the amount raised will reduce the fresh issue size and will not exceed 20% of the fresh issue.
Urban Company IPO: Who’s selling how much in OFS?
The company’s promoters are Abhiraj Singh Bhal, Raghav Chandra, and Varun Khaitan, who are not participating in the offer for sale. Meanwhile, the selling shareholders’ list is below:
Accel India IV (Mauritius): Up to Rs 433 crore.
Bessemer India Capital Holdings II: Up to Rs 173 crore.
Elevation Capital V (formerly known as SAIF Partners India V): Up to Rs 346 crore.
Internet Fund V Pte. Ltd.: Up to Rs 303 crore.
VYC11 Limited: Up to Rs 216 crore.
Urban Company IPO: Who are the book managers and registrar
The book running lead managers (BRLMs) of Urban Company IPO are Kotak Mahindra Capital Company, Morgan Stanley India Company, Goldman Sachs (India) Securities, and JM Financial. The issue’s registrar is MUFG Intime India (formerly Link Intime India).
Urban Company IPO: Business fundamentals
Urban Company, formerly known as UrbanClap Technologies India, was incorporated in December 2014. The company operates as a technology-driven, full-stack online marketplace for quality-driven services and solutions across various home and beauty categories. “Urban Company is your one-stop destination for expert local services,” as the company puts it on its website.
Urban Company: Core business
The company provides an online platform to book different services. These services include cleaning, pest control, electrician, plumbing, carpentry, appliance servicing and repair, painting, skincare, hair grooming, massage therapy, and many others. These are delivered by trained and independent service professionals.
Urban Company: Product offerings and revenue generation
Not just services, the company also sells products, with its newly launched brand ‘Native’. The company started the brand in the financial year 2022-23 (FY23). The company sells products like water purifiers and electronic door locks, which they started in FY24. It also sells tools and consumables to service professionals for their work. This aspect of their product sales has been part of their operations, with revenue from products sold to professionals reaching Rs 91.72 crore in FY22.
In FY24, the company generated revenue of Rs 28.77 crore, which was up from Rs 3.8 crore posted in FY23.
Urban Company IPO: Market and geographic presence
The company operates in 59 cities across India, the United Arab Emirates (UAE), Singapore, and the Kingdom of Saudi Arabia (KSA). Out of 59 cities, 48 of these cities are in India as of December 2024. This widespread presence allows Urban Company to operate on a hyperlocal model, dividing each city into multiple micro-markets to minimise travel distances for service professionals and ensure faster service fulfilment times for consumers. As of 2024, Urban Company operated in over 12,000 service micro-markets when aggregated across their platform.
Urban Company’s business segments
The company’s business is structured into three primary segments: India consumer services, native, and international business.
India consumer services: This category covers home, beauty, and wellness services, as well as the sale of products to service professionals within India.
Native: The segment focuses on the sale of Native branded products to consumers.
International business: This encompasses home and beauty services provided in the UAE, Singapore, and Saudi Arabia, including the sale of tools and consumables to service professionals in these regions. However, in January 2025, operations in Saudi Arabia transitioned to a joint venture.
Urban Company IPO: A look at financials
The company’s financial health over the period has improved. It has brought down its losses over the past three financial years. For the nine months ended December 2024, Urban Company reported a restated profit after tax of Rs 243 crore. However, the company was able to post a net profit due to a one-time deferred tax credit of Rs 215.46 crore.
This credit was recognised due to tax losses carried forward from earlier years and other temporary differences, indicating a utilisation of past losses to reduce current tax liability. In FY24, the company reported a restated loss of Rs 92.77 crore, narrowed year-on-year from a net loss of Rs 312.48 crore in FY23, while it was Rs 514.14 crore in FY22.
The company’s total income increased by 27.78% YoY to Rs 928 crore in FY24 from Rs 726.24 crore in FY23, mainly due to an increase in revenue from operations. The company’s revenue from operations stood at Rs 438 crore in FY22.
| Financial Year | Net/loss (Rs. Cr.) | Revenue (Rs. Cr.) |
| FY22 | -514.14 | 438 |
| FY23 | -312.48 | 726.24 |
| FY24 | -92.77 | 928 |
| 9M FY25 | 242.60 | 846 |
Urban Company: Future growth potential
The company’s serviceable addressable market in the top 200 Indian cities was estimated at Rs 1.73-1.80 lakh crore, which is 34-36% of the Total Addressable Market (TAM), in CY24. This highlights substantial untapped potential within India.
The Indian home services market is a significant and evolving sector, valued at approximately Rs 5 lakh crore ($59.2 billion) in CY24, and is projected to grow at a Compound Annual Growth Rate (CAGR) of 10-11% to reach over Rs 8 lakh crore ($97.4 billion) by CY29. This growth is driven by increasing urbanisation and busier lifestyles.
On top of that, the online full-stack service providers are expected to grow at an even faster rate of 20-22% CAGR between CY24-29. They can potentially reach to Rs 105,00-11,000 crore by CY29. This indicates significant headroom for growth, as only about 2% of Indian households utilised online home services in CY24, compared to over 50% in the United States and approximately 21% in China.
Urban Company IPO: Top risks to watch out for
Every business has some risks involved, and watch out for the key risks before you consider this IPO-
1. Change in labour laws: The biggest problem that the company may face in the future is that service professionals are classified as ‘independent contractors’, and any change in labour laws could reclassify them as ’employees’. This may lead to higher costs, operational restrictions, and increased liabilities. Protests and complaints from gig-worker unions have occurred in the past.
2. Dependence on internet search: Another factor that could hamper the growth of Urban Company is that the business relies on internet search engines and social media to drive traffic. Failure to appear prominently in search results or issues with online advertisements could adversely affect the business.
3. Response to customer preference: If the company fails to timely identify or effectively respond to evolving consumer preferences and spending patterns, or to offer appropriate categories of offerings could decrease demand and lead to declining revenue and results of operations.
4. Geographical challenges: Urban Company operates in countries like the UAE, Singapore, and Saudi Arabia, which expose it to risks such as exchange rate fluctuations, local business practice differences, legal and regulatory complexities, difficulties in managing and staffing international businesses, and competition from local companies. Earlier, the company had ceased operations in the United States and Australia in FY24 and FY23.
All in all, the question is, can this one-stop home solutions platform be your ticket to IPO market success? Well, watch out for the IPO date and issue details on Financialexpress.com. Keep watching the space for the updated RHP.