Management

Abhiraj Singh Bhal (Chairman, Managing Director and Chief Executive Officer), Raghav Chandra (Executive Director and Chief Technology and Product Officer), Varun Khaitan (Executive Director and Chief Operating Officer), Vamsi Krishna Duvvuri (Non-Executive Nominee Director), Ashish Gupta (Independent Director), Ireena Vittal (Non-Executive Director), Rajesh Gopinathan (Independent Director), Shyamal Mukherjee (Independent Director), Sonali Singh (Company Secretary and Compliance Officer) and Abhay Krishna Mathur (Chief Financial Officer).

Use of Proceeds

The total issue size is Rs. 1900 cr which comprises offer for sale (OFS) component (Rs.1428 cr) and fresh issue (Rs.472 cr). Company intends to use Net Proceeds from the issue towards expenditure for new technology development and cloud infrastructure (Rs.190 cr), expenditure on lease payments for the offices (Rs.75 cr), expenditure towards marketing activities (Rs.90cr) and general corporate purposes.

Competitive Strengths

Multi-Category, Hyperlocal Marketplace Driving Network Effects Urban Company operates a hyperlocal services marketplace structured into over 12,000 micro-markets as of June 30, 2025. Each micro-market typically spans a 3–5 km radius, optimized by category demand density—smaller for high-frequency services like cleaning or grooming, and larger for low-frequency, high-value categories such as painting. This structure ensures reduced travel time, faster fulfilment, and higher productivity for professionals. The model benefits from strong network effects: consumer satisfaction drives referrals, leading to deeper penetration and reduced micro-market size to as little as 1–3 km. This results in lower prices for consumers and higher earnings for professionals, who on average earn 30–40% more than peers outside platforms. With 83% of new professionals joining via referrals, scale enhances product innovation, partner upskilling, and consumer lifetime value.

Established Brand with Strong Consumer Trust Urban Company has built a trusted brand anchored in reliability, quality, and convenience, reflected in consistently high consumer ratings averaging 4.79–4.83 out of 5 over FY23–FY25. A minor dip in FY25 resulted from a change in methodology, allowing more flexible rating behavior. According to Redseer, Urban Company was India’s most searched online home services full-stack platform on Google Trends between January 2024 and March 2025, underscoring its strong consumer recall. As of June 30, 2025, the platform had facilitated 14.59 million unique consumers since inception, with nearly 6.81 million—or 47%—onboarded in just the past three years. Network effects reinforce brand affinity and repeat use, with cohort analysis showing rising Net Transaction Value (NTV) as consumers increase service frequency and adopt multiple categories, driving habit formation and higher lifetime value.

Strong Innovation and Product Development Capabilities Urban Company has consistently pioneered product innovations to standardize and enhance service quality, benefiting both consumers and professionals. It has introduced industry-first solutions such as the foam jet pump for AC servicing, Co-Pilot for appliance diagnostics, and roll-on wax for hygienic beauty treatments—many now widely adopted across the sector. The company also partners with OEMs to design professional-grade kits, cleaning chemicals, and hygiene packs, improving efficiency in beauty services. Leveraging consumer insights, Urban Company expanded into home solutions with its Native brand, launching water purifiers in FY23 and electronic door locks in FY24, both integrated with its consumer app for smart functionality. Co-Pilot further exemplifies its innovation, providing standardized appliance diagnosis and transparent consumer reporting. These initiatives strengthen brand differentiation, drive consumer trust, and enhance professional productivity at scale.

Enhanced Service Quality through Training, Tools, and Higher Earnings Urban Company strengthens service quality by combining structured training with access to high-quality tools and consumables. Its 339-member training team operates 247 classrooms across 17 cities, equipping professionals with SOPs, technology use, and service-specific skills. Continuous feedback, mentorship programs, and retraining further improve performance. To ensure consistency, the company supplies branded consumables under Native, Elysian, Crave, and exclusive tie-ups, with 82–89% of orders delivered within three days. Barcoding and usage tracking reinforce authenticity, offering consumers a “genuine product guarantee.” This ecosystem boosts professional productivity and consumer trust. In FY25, service professionals retained 72% of service fees, with high performers earning an average ₹33,599 per month. Progression tiers incentivize long-term engagement, driving repeat professional contribution to 83.55% of India NTV in FY25, up from 73.16% in FY23.

Key Risks & Concerns

Intense Competition from Offline and Online Players Urban Company operates in highly competitive markets with evolving consumer preferences, fragmented supply, and low online penetration. It faces pressure from traditional offline vendors, organized chains, and OEM repair services that leverage local trust and flexible pricing to attract cost-sensitive consumers. Additionally, online rivals offering higher incentives risk professional churn. Internationally, competition from well-funded platforms with broader offerings and aggressive marketing further intensifies challenges. These dynamics may force higher incentives and lower prices, impacting revenues, costs, and profitability.

Risk of Service Professional Retention and Supply Shortages Urban Company’s success depends on sustaining and expanding its network of service professionals, but retention faces risks from earnings levels, training quality, satisfaction, and evolving engagement terms. Seasonality impacts professional activity, while overseas markets face added challenges such as visa policies, aggregator inefficiencies, and shortages of skilled workers. Complaints around fees, ratings, and platform norms can also drive dissatisfaction. Any inability to attract, retain, or adequately supply service professionals could materially harm business operations and financial performance.

Risk of Platform Circumvention Urban Company faces the risk of consumers and service professionals bypassing its platform to engage directly, thereby avoiding platform fees. Professionals may leverage the reputation and clientele built through the platform to transact independently, while consumers may prefer lower costs despite reduced assurance on service quality or accountability. Although preventive measures exist, such as restrictions on cancellations after service commencement, they may not fully deter circumvention. Persistent bypassing could materially impact revenues, profitability, and overall business sustainability.

Outlook and Valuation

Urban Company has established itself as India’s largest full-stack, tech-driven home and beauty services marketplace, with an expanding footprint in international markets such as the UAE, Singapore, and Saudi Arabia (via JV). Its hyperlocal, micro-market operating model, network effects, and structured standard service units (SSUs) create strong barriers to entry in a highly fragmented industry. With over 12,000 micro-markets and 54,000+ monthly active service professionals as of June 2025, the company is well-placed to benefit from rising urbanization, increasing disposable income, and a shift from informal to organized service channels.

Financial performance over FY23–FY25 reflects steady scale-up alongside a disciplined march toward profitability. Revenues grew from Rs.637cr in FY23 to Rs.1,144cr in FY25, representing a CAGR of ~35%. Importantly, EBITDA losses narrowed sharply from Rs.364cr in FY23 to just Rs.32cr in FY25, with EBITDA margin improving from -57.2% to -2.75%. This improvement has been driven by higher gross profit, operating leverage, and rationalized employee costs. Notably, Adj. PAT turned positive in FY25 at Rs.240cr, translating into a PAT margin of 20.97% and EPS of Rs.1.66, highlighting early signs of sustainable profitability and tax benefit. Beyond financials, Urban Company’s strengths lie in professional empowerment, in-house training, and innovation in tools and consumables. Its product vertical, Native, adds an incremental growth lever, with water purifiers and electronic door locks already gaining traction. These consumer-tech adjacencies not only diversify revenues but also strengthen ecosystem stickiness.

Further, consistently high customer ratings (4.79/5 in Q1FY26) and strong retention trends underscore platform trust. Key risks include intense competition from offline vendors and niche online players, potential service professional churn, and circumvention of the platform. International expansion adds executional and regulatory complexity. However, given its improving profitability trajectory, strong brand equity, Sticky customers, scalable tech-driven model, cash efficient model, and robust market opportunity (India’s online home services space projected to grow at 10 % CAGR till FY30) Urban Company appears well-positioned for long-term value creation in the formalization of India's home-services sector. Vulnerable consolidated margins and unprofitable adjacencies makes it a risky investment. Urban Company is valued at 11.6x EV/sales of Fy25. We believe the market will begin questioning valuations if loss-making adjacencies do not become profitable. An aggressive investor may subscribe to the issue and actively monitor its execution post listing.