Urban Company IPO: Offer For Sale By Accel, Elevation And Tiger Global, Fresh Issue Worth Up To Rs 429 Crore

Home services provider Urban Company Ltd. filed draft papers for its initial public offering worth up to Rs 1,900 crore on Monday. The offer will be a combination of a fresh issue and a stake sale by existing investors.

The Elevation-, Accel- and Prosus-backed technology platform will be looking to raise up to Rs 429 crore through a primary issuance of shares. This is lower than the Rs 528-crore fresh issue that shareholders of the company had earlier approved.

The company might also consider a pre-IPO placement of up to Rs 86 crore, which will then lead to a reduction in the fresh issue size.

In addition, existing stakeholders will be looking to offload shares worth up to Rs 1,471 crore. Accel India will be selling a stake worth up to Rs 433 crore, Bessemer India up to Rs 173 crore and Elevation Capital up to Rs 346 crore. Tiger Global affiliate Internet Fund V and Vy Capital are also looking to sell shares worth up to Rs 303 crore and Rs 216 crore, respectively.

On a fully diluted basis, Accel, Bessemer, Elevation, Internet Fund and Vy Capital hold 10.5%, 6.5%, 10.8%, 4.7% and 9.2% stakes in the company.

Urban Company plans to utilise the fresh issue funds to pay for technology development and cloud infrastructure, lease payments for its offices, marketing activities and general corporate purposes.

Kotak Mahindra Capital Co., Morgan Stanley India Co., Goldman Sachs India Securities Pvt., and JM Financial Ltd. are the lead bankers for the deal.

• Revenue rose 41% to Rs 846 crore from Rs 601 crore.

• Ebitda loss narrowed to Rs 22 crore from Rs 97 crore.

• Profit before tax rose to Rs 27 crore from a loss of Rs 58 crore.

In fiscal 2024, the Delhi-based company saw its topline grow 30% on a year-on-year basis to Rs 828 crore in fiscal 2024. Its loss before tax also narrowed to Rs 93 crore from fiscal 2023's loss of Rs 312 crore.

While Urban Company has generated a positive operating cash flow for the nine-month period ending December 2024, its cash flows were negative for the previous three fiscals.

"We may continue to increase our operating expenses as we expand offerings on our platform and invest in technology," it said.

The company has not paid out any dividends to its shareholders since 2022. As of December 2024, it is sitting on a cash balance of nearly Rs 590 crore, including bank balances.

In March, Urban Company announced the launch of its Insta Help service, which marked its foray into the quick commerce space. The service was launched across select locations in Mumbai.

In July last year, venture capital Dharana acquired Urban Company stock worth Rs 400 crore from employees and other shareholders, making it the largest ESOP liquidity in Urban Company's history back then.