The shares of a Small-Cap company, which specializes in providing a technology-driven marketplace for a wide range of home and beauty services, are gaining attention as they have nearly doubled from their IPO price. In this article, we will explore the reasons for the Urban Company rally and examine whether its P/E ratio of 112 is justified.
With a market capitalization of Rs. 26,908.80 crores on Monday, the shares of Urban Company Ltd rose upto 8.58 percent, making a high of Rs. 201.00 per share compared to its previous closing price of Rs. 185.10 per share.
Urban Company at a Glance
Urban Company, Incorporated in December 2014, is a technology-driven, full-stack online marketplace offering a range of home and beauty services. As of June 30, 2025, the company has a presence in 51 cities across India, the United Arab Emirates, and Singapore. This excludes cities covered under its joint venture in the Kingdom of Saudi Arabia.
The platform allows consumers to book services such as cleaning, plumbing, electrical work, appliance repair, beauty treatments, and massage therapy. These services are delivered by trained and background-verified professionals, ensuring safety and quality.
It not only connects customers with service providers but also empowers its professionals by offering training, tools, financing, insurance, and branding support. This improves the quality of services and helps professionals increase their income potential. The company has expanded into home solutions with the launch of its in-house brand ‘Native’. Under this brand, it offers products like water purifiers and electronic door locks directly to consumers, adding a new stream of business.
In the three months ended June 30, 2025, the platform had an average of 54,347 monthly active service professionals, defined as professionals who delivered at least one service in a given month. The company operates in over 12,000 service micro-markets, showcasing its extensive geographic and service-level reach.
Urban Company generates revenue through three key channels: platform service fees paid by consumers, sales of products and tools to service professionals, and direct sales of its Native-branded home products to customers.
IPO Double?
Urban Company launched its IPO with a book-building issue of Rs. 1,900.24 crore. The issue is a combination of fresh issue of 4.58 crore shares aggregating to Rs. 472.24 crores and offer for sale of 13.86 crore shares aggregating to Rs. 1,428.00 crores.
The bidding started from September 10, 2025, and ended on September 12, 2025. The allotment for Urban Company IPO was finalized on September 15, 2025, and the IPO price band is set at Rs. 103.00 per share.
Shares of Urban Company Limited listed at a price of Rs. 162.25, which is 57.52 percent higher than the allotment price. Compared to its offer price, it has delivered the peak returns of 95.14 percent at an all-time high price of Rs. 201.18 by nearly doubling the IPO price.
Is its P/E justified?
The reason for the high P/E is the strong market expectations surrounding the company. Currently, it has no listed peers and is leading the tech-driven home services space across India, the UAE, and Singapore, offering everything from beauty treatments to appliance repairs and plumbing, all of which are essential to the current generation.
As more people move towards digitalization in all aspects of life, Urban Company provides the everyday services that common people need. With strong brand recognition, it has become the go-to platform for online home services. The company has also been making significant developments to expand its business to new heights.
But in the unlisted market, a new player has emerged, named Snabbit. It is an Indian quick-service platform launched in 2024 by Aayush Agarwal, offering on-demand home services like cleaning, dishwashing, and laundry within minutes at an hourly rate. So moving forward, it will probably expand its operations, making tough competition for Urban Company.
The company’s financials have also shown significant financial improvement over the past three years. As of March 31, 2025, total income rose to ₹1,260.68 crore from ₹726.24 crore in FY23.
The company turned profitable in FY25, reporting a PAT of ₹239.77 crore, compared to losses of ₹92.77 crore in FY24 and ₹312.48 crore in FY23. Net worth increased to ₹1,781.28 crore, while assets grew to ₹2,200.64 crore.
Urban Company has turned profitable from its losses, and there are high expectations for the stock from a future-oriented perspective. While the current P/E ratio is high, as the company continues to execute its ideas and developments, it is expected to deliver strong performance in the coming days. This could lead to good earnings growth, resulting in a more reasonable P/E ratio and better valuation for the stock in the upcoming days.
Conclusion
Urban Company’s stock has performed very well since its IPO, and the high P/E ratio shows that investors have strong expectations for its future. The company has turned profitable and is growing steadily in India and overseas. Its services are in high demand as more people turn to online platforms for everyday needs. While the stock looks expensive right now, if the company continues to grow and increase its profits, the valuation could become more reasonable over time.
Written by Sridhar J
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