Urban Company gets Sebi approval for Rs 1,900-crore IPO

Urban Company gets Sebi nod for Rs 1,900-crore IPO

Home services marketplace Urban Company has secured approval from the Securities and Exchange Board of India (Sebi) to launch its initial public offering.

The company, which filed its draft red herring prospectus in April, plans to raise about Rs 1,900 crore through the IPO. The issue will comprise a fresh equity raise of Rs 429 crore alongside an offer for sale (OFS) of Rs 1,471 crore by existing investors.

Accel India, Bessemer India, Elevation Capital, Tiger Global and VY Capital are among the early backers lining up partial exits, Moneycontrol reported earlier.

Kotak Mahindra Capital, Morgan Stanley India, Goldman Sachs (India) Securities, and JM Financial are the book-running lead managers. Urban Company has also kept room for a pre-IPO placement of up to Rs 85.8 crore, which, if executed, would proportionately reduce the fresh issue size.

The Gurugram-based firm, formerly known as Urban Clap, intends to use the primary capital over the next three years for platform innovation, technology upgrades, marketing, and office expansion.

Of this, Rs 190 crore is allocated towards tech and cloud infrastructure to improve customer and partner experience, Rs 70 crore for office leases in India and overseas, and Rs 80 crore for brand-building across digital, outdoor and OTT platforms. The remainder will cover general corporate purposes, capped at 25 percent of gross proceeds as per Sebi norms.

Expansion remains a key theme. Already present in the UAE, Saudi Arabia, and Singapore, Urban Company said it will deepen its international footprint beyond the 59 cities it currently operates in across four countries.

Financially, the company has shown steady growth. Revenue from operations increased from Rs 437.6 crore in FY22 to Rs 637 crore in FY23 and further to Rs 828 crore in FY24. Losses have narrowed over time, with adjusted EBITDA moving from negative Rs 37.4 crore in FY22 and negative Rs 29.8 crore in FY23 to a positive Rs 9.3 crore in the nine months ended December 31, 2024.

Net profit came in at Rs 242.3 crore during the same nine-month period, compared with a Rs 514.1 crore loss in FY22 and a Rs 312.4 crore loss in FY23. However, a large part of this profit was driven by a deferred tax credit of Rs 215 crore.

With Sebi’s nod, Urban Company now joins the queue of tech-enabled firms seeking to test public market appetite in 2025, as investors look for profitability alongside growth.