Urban Company GMP jumps as IPO gets fully subscribed within hours: What top brokerages are saying

Urban Company’s Rs 1,900-crore IPO has drawn strong demand from investors on Day 1, underscoring the Street’s appetite for profitable consumer-tech businesses. The issue was fully subscribed within two hours of launch, led by strong interest from the retail investors.

In line with the demand, the GMP has also risen to 37% over the issue price.

The home services marketplace, which connects customers to trained professionals across categories like cleaning, repairs and beauty, has expanded rapidly in recent years and posted its first profit before tax in FY25.

Urban Company IPO details

The offer, priced in the band of Rs 98-103, consists of a fresh issue of Rs 472 crore and an offer for sale of Rs 1,428 crore by promoters and early investors. Proceeds will be used to fund technology upgrades, marketing, and expansion of physical centres. At the top end, the issue values the company at nearly Rs 15,000 crore.

Analysts say the company’s tech-driven, hyperlocal model, backed by strong customer retention and high repeat usage, sets it apart from loss-making peers like Zomato and Paytm at the time of their listings. However, the valuation has also been flagged as expensive, trading at nearly 12-13 times FY25 sales.

Here's what brokerages are saying

BP Equities has a clear “Subscribe” rating, citing Urban Company’s leadership in a fragmented $60 billion home services market, its asset-light model and improving financials.

“The IPO offers attractive medium to long-term potential given the company’s strong brand, scalable operations, and improving profitability,” the brokerage said.

Arihant Capital recommends “Subscribe for Listing Gains.” It highlights the hyperlocal model that reduces travel time for professionals and improves efficiency, along with cross-selling opportunities via its digital platform.

However, Arihant cautioned that the stock is richly valued at 12.9 times price-to-sales at the upper band.

Deven Choksey Research has assigned a “Subscribe” rating, pointing to strong growth in net transaction value (25.5% CAGR FY23-25) and improved EBITDA margins, which narrowed from -57% in FY23 to -2.8% in FY25.

Other brokerages such as Mehta Equities and ICICI Direct have taken a more cautious stance, flagging the valuation premium. ICICI Direct in particular has a “Neutral” view, arguing that while Urban Company is well-placed for long-term growth, near-term upside may be capped at the current pricing.

Also read: Urban Company IPO fully subscribed on Day 1 so far, GMP at 35%: Should you bid?

The IPO has brought Urban Company into the spotlight as one of the few profitable consumer-tech listings in India. For investors, brokerages say the bet boils down to whether its high valuation is justified by the growth runway in India’s underpenetrated home services market.

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