Urban Company IPO Oversubscribed: Retail Bids 2.6 Cr Shares, Institutional Subscription Remains Low

Hyperlocal services platform Urban Company saw a promising debut on the day first day of its IPO. Within two hours of opening, the IPO was oversubscribed 1.3 times at around 10.45 am. It received bids for 2.6 crore shares against 1.9 crore shares reserved for retail investors.

The portion reserved for employees also witnessed strong interest, with subscriptions reaching 1.53 times. The company received bids for 4.3 lakh shares against 2.8 lakh shares set aside for them.

In contrast, qualified institutional buyers (QIBs) showed limited participation, bidding for only 1.1 crore shares compared to the 5.8 crore shares reserved for them. This results in only 20% subscription.

Additionally, non-institutional investors (NIIs) also subscribed to only 80% of their allotment, with bids for 2.3 crore shares against the 2.9 crore shares available for them. In total, the issue was subscribed 57%, with investors bidding for 6 crore shares against 10.7 crore shares on Offer.

Urban Company is eyeing a fund raise of ₹1,900 crore through its IPO, comprising a fresh issue of shares worth ₹472 crore and an offer for sale (OFS) component of ₹1,428 crore. The price band has been set between ₹98 and ₹103 per share, with investors able to bid in lots of 145 shar

What Do Analysts Say?

Market analysts see the Urban Company IPO as more than just a funding event as it represents a broader shift in India's consumption patterns toward convenience and time-saving services.

"The ₹1,900 crore IPO is more than just another listing....the platform has redefined home services by turning what was once a discretionary luxury into a lifestyle essential. That cultural shift remains its strongest moat," said Hariprasad K, founder of Livelong Wealth.

However, the valuations demand scrutiny. He stated that the issue is price at 12x sales and 62x earnings, placing it alongside global consumer-tech platforms but at a premium to domestic peers. "While the Grey Market Premium (GMP) hints at strong listing-day sentiment, the long-term thesis is more critical for investors".

According to him, the opportunity lies in tier 2 and 3 markets, where rising incomes and smartphone adoption could unlock an underpenetrated $97 billion home-services market by 2029.

If Urban Company succeeds in embedding itself as a daily-use utility through subscription models and instant services, Hariprasad believes that it could expand well beyond metros.

On the other hand, Ashutosh Sharma, head of the India ecosystem at Prosus believes that Urban Company exemplifies the next wave of Indian consumer platforms; tech-first, operations-led, and globally benchmarked.

Urban Company Financials

In FY25 2025, the company reported a 38% revenue increase to ₹1,144.5 crore and swung to profitability with a ₹240 crore profit after posting a loss of ₹93 crore the previous year.

Product sales, including native, make up around 26% of total revenue, underscoring the diversification beyond service transactions.  This number was driven by growth in its India and international businesses. A key contributor to the surge in net profit was the recognition of deferred tax assets amounting to ₹211 crore.

In addition, it also reported an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) of ₹11.1 crore, against a loss of ₹119 crore in FY24. Its profit before tax was ₹28.6 crore in the same fiscal year.

Urban Company operates a technology-driven, full-stack online market place for quality-driven services and solutions across various home and beauty categories. Apart from India, it has presence across United Arab Emirates, Singapore, and the Kingdom of Saudi Arabia.

The platform enables consumers to easily order services, including cleaning, pest control, electrician, plumbing, carpentry, appliance servicing and repair, painting, skincare, hair grooming and massage therapy. These services are delivered by trained and independent service professionals at the consumers' convenience.