Urban Company IPO opens today with 35% GMP: Should you subscribe?

Urban Company, India’s largest tech-enabled home services marketplace, will open its Rs 1,900 crore IPO for subscription today. The offer, priced at Rs 98–103 per share, comprises a fresh issue of Rs 472 crore and an offer-for-sale (OFS) of Rs 1,428 crore by existing investors. The issue will close on September 12, with listing slated for September 17 on the BSE and NSE.

Urban Company IPO: Check GMP on Day 1

On the IPO opening day, the GMP is around Rs 35, indicating a premium of 35% over the issue price. The GMP has consistently risen since the IPO announcement, reflecting healthy demand for the IPO.

Company overview

Founded in 2014, Urban Company connects customers with trained service professionals across categories such as cleaning, beauty, appliance repair, pest control, plumbing, electrical, and wellness. It also sells products like water purifiers and electronic door locks under the “Native” brand and recently launched InstaHelp, a micro-market daily help service.

The company operates in 47 cities in India and has a presence in the UAE, Singapore, and Saudi Arabia through a JV.

Also Read: Urban Company vs Shringar vs Dev Accelerator. Which IPO should investors pick?

It boasts over 14.5 million unique consumers since inception, with 46% added in the last three years. On the supply side, it had more than 54,000 active professionals as of June 2025, many of whom earn 30–40% more than peers in the unorganized sector, according to Redseer.

Financials and valuations

Urban Company reported a revenue of Rs 1,144.5 crore in FY25, a growth of 38% year-on-year. It turned profitable with a net profit of Rs 240 crore in FY25, aided by a deferred tax credit of Rs 211 crore. On a pre-tax basis, profits stood at Rs 28 crore. The company also posted a small but significant profit in the June 2025 quarter.

At the upper price band, the IPO values Urban Company at around Rs 14,800 crore, implying a P/E multiple of 65.7x FY25 earnings and a P/S of 12.9x. Analysts say the issue is “fully priced,” leaving little room for near-term upside.

Strengths

Urban Company has strong brand recall, a trusted platform, and high consumer retention. Its hyperlocal micro-market strategy enables faster fulfillment and better professional utilization. In-house training and supply of standardized consumables ensure service quality, while its tech platform uses AI and machine learning to optimize demand-supply balance.

Risks

The company has a history of losses and negative cash flows. Its profitability remains thin, excluding tax credits, and depends on scaling newer offerings like Native and InstaHelp.

Competition from offline players and smaller online rivals is intense, and consumer-professional circumvention of the platform could hurt revenues. Regulatory risks around gig worker classification and international expansion add further uncertainty.

Should you subscribe?

Brokerages recommend subscribing with a long-term view. While near-term valuations appear stretched, Urban Company’s leadership in a largely unorganized Rs 60 billion home services market and its ability to scale new categories offer significant structural growth potential.

"Conservative investors may wait for better entry points, but those betting on the formalization of India’s home services sector may find the IPO worth considering," said Anand Rathi.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)