Udaan Got Smaller on Purpose. Now It’s Plotting an IPO

Udaan spent years chasing scale across India. Then it deliberately reversed course. After shrinking its footprint, narrowing categories and prioritising better unit economics, the B2B ecommerce company is now targeting profitability by the end of 2027 and a public listing by late 2027 or early 2028.

The reset was substantial. Udaan once operated across roughly 80 cities and multiple categories, but pulled back to around 16 clusters with a sharper focus on groceries and staples.

That contraction pushed revenue down from earlier peaks, but management says the economics of the remaining markets have strengthened considerably. For FY26, the company expects revenue to grow 10–12% while losses narrow by about 20%.

Between Q4 CY23 and Q1 CY26, Udaan says revenue grew at roughly a 25% compound annual rate, contribution margin improved by nearly 500 basis points and EBITDA burn fell around 70%. Bengaluru and several other major clusters have already reached EBITDA profitability. The company is now prioritising wallet share, purchase frequency and contribution per order rather than expansion for its own sake.

FY25 showed both sides of that transition. Revenue declined 20% to ₹4,561 crore after Udaan exited non-essential categories, while net loss narrowed 37% to ₹1,055 crore — its third consecutive year of shrinking losses. A $160 million recapitalisation announced in July 2026 further strengthened the balance sheet through fresh equity, debt and debt-to-equity conversion.

Udaan is also trying to extract more value from the infrastructure it already has. Private labels now contribute 15–25% of staples sales across operating cities, while its horeca360 business is expanding procurement for institutional customers. The recent ₹500 crore all-share acquisition of LYNK Logistics adds further distribution capacity.

The IPO target therefore depends on proving that a smaller Udaan can become a stronger one. After years of promising a listing, the next 18 months will test whether density, disciplined spending and better market economics can finally turn the company’s turnaround into sustained profitability.