Urban Company Soars 57% On Market Debut SEBI Analysts Warn Valuations Already 'Priced In'

Gig-economy giant Urban Company made a strong debut on the Indian stock market on Wednesday. The stock listed at ₹161 on the BSE and ₹162.25 on the NSE, marking a premium of 56% and 57.5% respectively over the issue price of ₹103.

The listing beat expectations, as analysts and grey market trends had signalled a 40–50% pop. Ahead of the debut, shares of the IPO were commanding a premium of ₹51 in the unlisted market, according to Investorgain.

Urban Company: The Road Ahead

From SEBI-registered platform Equity Insights Elite, analysts noted that Urban Company is trading at a hefty valuation of nearly 20 times FY25 market cap-to-sales.

They said the company is a technology-driven, comprehensive online services marketplace delivering solutions across home and beauty categories, currently operating in 51 cities across India, the UAE, and Singapore.

Between FY23–25, revenue grew at a 34% compounded annual growth rate, with profitability improving meaningfully. Segment performance in FY25 was led by India consumer services, which posted ₹881 crore in revenue and ₹88 crore adjusted EBITDA with 10% margins, compared to losses in earlier years. 

Its native and international segments contributed ₹116 crore and ₹147 crore in revenue, respectively, though both remained loss-making.

Equity Insights Elite highlighted the massive headroom for growth, pointing to India's $60 billion home services market, where online penetration is still below 1% in FY25. By contrast, penetration rates are approximately 21% in China and more than 50% in the U.S. Urban Company's adoption in India covers only 2% of households, leaving significant room for expansion.

They added that while momentum is expected to sustain and margins should improve as scale builds, much of this is already priced in at current valuations.

IPO Saw Robust Demand

The ₹1,900 crore IPO received an overwhelming response, with subscriptions topping 100 times. The overall book was oversubscribed 103.63 times. 

Retail investors subscribed 39.25 times, non-institutional investors (NIIs) 74.04 times, and qualified institutional buyers (QIBs) drove the strongest demand with 140.20 times subscription. Bloomberg reported it as the most heavily subscribed share sale in India this year.

The offer included a fresh issue of 4.58 crore equity shares worth ₹472 crore and an offer-for-sale of 13.86 crore shares worth ₹1,428 crore. 

The price band was set at ₹98–₹103 per share. The IPO opened on September 10 and closed on September 12, with allotment finalized on September 16.

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