Highlights
Urban Company Files Draft Red Herring Prospectus for IPO
Home services marketplace Urban Company has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) to initiate an initial public offering (IPO) on Monday. This IPO encompasses a new issue of equity shares valued at Rs 429 crore (approximately $50 million) alongside an offer for sale (OFS) of equity shares amounting to Rs 1,471 crore, as outlined in the DRHP.
Details of the Offer for Sale
Within the offer for sale, Accel India is set to sell shares worth Rs 433 crore, while Elevation Capital and Tiger Global plan to offload shares valued at Rs 346 crore and Rs 303 crore, respectively. Additionally, VY Capital and Bessemer are prepared to divest shares worth Rs 216 crore and Rs 173 crore through the IPO.
The DRHP indicates that Elevation Capital holds the title of the largest external shareholder with 10.84%. Accel India and VY Capital follow with stakes of 10.5% and 9.18%, respectively. Steadview and Prosus each own a stake of 6.80%, while Bessemer and Tiger Global command 6.46% and 4.73%, accordingly. The firm’s co-founders — Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra — collectively hold 20.01%, which is evenly divided among them.
Listing Plans and Management
Urban Company intends to list its shares on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The IPO process will be handled by Kotak Mahindra, Morgan Stanley, Goldman Sachs, and JM Financial, who will serve as the book-running lead managers.
Investor Exit Strategy
Notably, as an early-stage investor, Accel is poised to achieve a significantly greater exit compared to other investors in Urban Company. Its exit value is projected to be 16.6 times higher than that of Tiger Global, 5.6 times greater than VY Capital’s, and 97% more than Bessemer India’s. Elevation Capital is also expected to secure a profitable exit due to its early investment in Urban Company. Last year, Snapdeal co-founders Kunal Bahl and Rohit Bansal realised a 200X return on their investment in Urban Company through their early-stage investment platform, Titan Capital.
Utilisation of Proceeds
The company has indicated that the net proceeds from the fresh issue will be directed towards new technology, cloud infrastructure, lease payments, marketing efforts, and various general corporate purposes.
Financial Performance
For the first nine months of FY25, the company reported revenue of Rs 846 crore and a restated profit of Rs 24.25 crore. During the full fiscal year that ended in March 2024, it declared revenue of Rs 828 crore and incurred a loss of Rs 92.7 crore.
