Urban Company IPO Fully Subscribed In Just 2 Hours; SEBI RA Sees Growth Potential Despite Valuation Risks

Urban Company’s ₹1,900-crore IPO opened to a strong response on Day 1, with the issue getting fully subscribed within just two hours of launch.

By 12 p.m. IST, NSE data showed bids for 10.81 crore shares against 10.67 crore shares on offer. By 03:30 p.m., the number of bids had increased to 18.02 crore.

The IPO price band has been set at ₹98 - ₹103 per share, with a minimum application of one lot of 145 shares.

The company intends to raise ₹472 crore from the issue of fresh shares, while ₹1,428 crore is allocated to an offer for sale (OFS) by existing shareholders. The shares will be listed on both the BSE and NSE.

The subscription data indicates broad-based interest across investor categories. The non-institutional investor (NII) segment was subscribed 1.29 times, while the retail individual investor (RII) portion witnessed even stronger traction, getting subscribed 3.02 times. On the other hand, the qualified institutional buyer (QIB) category received 20 percent subscription by noon.

Urban Company operates a hyperlocal, multi-category marketplace for home and beauty services. Its platform connects over 40,000 service professionals with more than 5 million customers across India, the UAE, Saudi Arabia, and Singapore.

Led by CEO Abhiraj Singh Bhal and co-founders Varun Khaitan and Raghav Chandra, Urban Company is backed by marquee investors including Accel, Tiger Global, and Naspers.

Analysts Takes

While the company enjoys strong brand equity, its valuation remains stretched at 60x P/E and 12.9x Price-to-Sales (P/S), according to SEBI-registered Financial Sarthis. Its FY25 profitability was aided by one-time tax credits.

However, the analyst believes that Urban Company’s market leadership and growth prospects stand out even though it is highly reliant on gig workers. The grey market premium (GMP) suggests potential listing gains of 30–35%, although long-term investors may need to weigh valuations carefully, the analyst added.

The market, valued at $59.2 billion in 2024, is projected to reach $97.4 billion by 2029, with online penetration still below 1%, indicating significant growth potential, said SEBI-registered analyst Aditya Hujband.

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