Urban Company, known for bringing home services right to your doorstep, is making headlines with its plans for an initial public offering (IPO). The tech-savvy company has recently filed its Draft Red Herring Prospectus (DRHP) for an impressive ₹1,900 crore IPO, marking its significant entry into India’s public market scene.
Key Insights into Urban Company’s Upcoming IPO
As Urban Company prepares for this financial milestone, here are five critical aspects to consider regarding its IPO.
Breakdown of the ₹1,900 Crore Offering
The IPO consists of two main components:
- Fresh Issue: Urban Company will issue shares valued at ₹429 crore.
- Offer for Sale (OFS): Existing investors, including prominent names like Accel and Tiger Global, will sell shares worth ₹1,471 crore.
This dual approach allows the company to raise capital while enabling early investors to cash in on their stakes.
Strategic Use of Funds
Urban Company is not merely raising funds for expansion; it has specific plans for the ₹429 crore raised through the fresh issue:
- Investment in Technology: ₹190 crore will be allocated to developing new technologies and enhancing cloud infrastructure.
- Operational Growth: Remaining funds will support office leases and marketing efforts aimed at drawing in more users and widening its operational reach.
Founders Retain Their Stake
The company’s founders — Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra — who collectively own about 21% of Urban Company, are not selling any of their shares in this IPO. However, notable investors like Accel and Elevation Capital will be partially exiting, with Accel planning to sell shares worth ₹433 crore and Elevation Capital offloading ₹346 crore.
Early Investors Reap Rewards
Urban Company’s journey from a nascent startup to a publicly traded entity has proven lucrative for early backers. For instance, Titan Capital invested just ₹57 lakh in the beginning and has seen nearly 200 times returns through recent secondary transactions. Notably, Dharana Capital acquired shares worth $50 million from early investors at a valuation of $1.8 billion.
Robust Financial Performance
Urban Company is not just riding on its reputation; its financials tell a compelling story. In the first nine months of FY25, it reported an operating revenue of ₹846 crore and achieved a net profit of ₹242 crore, a substantial improvement from a ₹58 crore loss during the same period in 2023.
With an ambitious IPO on the horizon, Urban Company is poised for exciting growth. Stay tuned for more updates on this significant development in the Indian market.
