Urban Company founders and investors cash out Rs 1,395 Cr in pre-IPO deals

Urban Company founders Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra have made a secondary exit worth Rs 780 crore ($91 million) ahead of the company’s initial public offering (IPO)

According to the draft red herring prospectus (DRHP), Urban Company’s founders — Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra — collectively offloaded personal equity worth Rs 780 crore between September 2024 and March 2025. Meanwhile, Bessemer, Accel, and Tiger Global also exited partially, selling a combined Rs 615 crore worth of shares.

Their secondary exit began in September 2024 with a Rs 121 crore cash sale to VY Capital. In October, they sold shares worth Rs 124.5 crore to Prosus. By December last year, they had sold an additional Rs 482 crore worth of equity to Prosus and Arohi Seed.

This was followed by a Rs 50 crore equity sale to Dharana Capital in January 2025. The final tranche, worth Rs 1.8 crore, was sold to Sanjiv Rangrass, Sri Harsha Majety, and Venturesail LLP.

As per our sources, a meaningful percentage of the post tax proceeds of these secondary transactions were used by the founders to fully pay for shares allotted to them on a partly-paid basis in 2019. These shares, issued at a nominal price of Rs 1 in 2019, must be fully paid for ahead of the IPO. While the secondary transaction involved a complete cash exchange, our sources have clarified that a meaningful portion of the funds from the sale were ultimately paid back to the company to fully pay for the partly paid shares of the 2019 Rights Issue.

In addition to the founders' share sale, Bessemer, Accel, and Tiger Global sold stakes worth Rs 142 crore, Rs 194 crore, and Rs 84 crore, respectively, to Think Investments. Bessemer also conducted a separate secondary sale worth Rs 195 crore to Arohi Seed SPC ahead of the IPO.

Urban Company plans to raise Rs 1,900 crore through its initial public offering (IPO), comprising a fresh issue of Rs 429 crore and an offer for sale (OFS) worth Rs 1,471 crore. As part of the OFS, investors including Accel, VY Capital, Prosus, Bessemer, and Elevation will divest partially.

In the first nine months of FY25, the company reported a total income of Rs 930 crore, marking a 37.8% year-on-year growth compared to the same period in the previous fiscal. Significantly, it also posted a profit of Rs 27.1 crore during this period.

Update at 3:35 PM, Friday: The story has been updated with additional information from sources close to the company.