Urban Company IPO: Do valuations give investors any room for listing gains?

Urban Company, India’s largest home services platform, is all set to launch its much-awaited IPO next week. The Rs 1,900 crore public issue is one of the rare tech IPOs this year, and naturally, investors are keen to know whether the pricing leaves any scope for meaningful listing gains.

While the GMP signals healthy listing interest, analysts are flagging concerns over steep valuations. Urban Company is being priced at nearly 12 times its sales, which puts it in a league similar to global consumer-tech platforms but at a significant premium to many domestic peers.

“At nearly 12x sales, Urban Company’s valuation looks stretched. There may be some listing gains, but in the short term, it doesn’t leave much value on the table. It’s more suited for aggressive long-term investors,” said Abhishek Jain, Head of Research at Arihant Capital Markets.

Ahead of the IPO, the stock is trading at a grey market premium (GMP) of about Rs 24.5, suggesting a potential 24% upside over the issue price. However, it is to be seen whether the GMP materialises into actual listing gain or valuations come back to haunt the company.

The IPO details

The offer is a mix of Rs 472 crore fresh issue and an offer-for-sale worth Rs 1,428 crore by existing investors. The price band has been fixed at Rs 98–103 per share, giving the company a post-issue valuation of about Rs 14,100–14,800 crore.

Retail investors can apply with a minimum lot size of 145 shares, which translates to around Rs 14,935 at the lower end of the band. Employees will get a Rs 9 discount per share. The IPO opens on September 10 and allotment is scheduled for September 15, while listing on the BSE and NSE is set for September 17.

A rare tech play

Founded in 2014 (then known as UrbanClap), the company has grown into a full-stack home and beauty services marketplace. From cleaning, beauty, pest control, and appliance repair to water purifiers and smart locks under its Native brand, Urban Company has built a broad platform with over 97 million service orders completed in India since inception.

Its scale, strong brand recall, and focus on improving earnings for service professionals (15–20% higher than comparable gig platforms, according to Redseer) have made it a leader in its category.

What should investors do?

Urban Company’s IPO is drawing attention for being both a consumer-tech story and a large listing in FY26. However, much of the excitement may already be priced in. The GMP hints at a strong debut, but the long-term returns will depend on how well the company manages profitability and expansion.

For retail investors, this may be a case of balancing expectations, say experts, as there could be some immediate gains on listing day, but those looking for bigger upside may need to hold with patience, given the rich valuations.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)