Rentomojo IPO Filing Signals Growth in India's Rental Market

Rentomojo Limited, a prominent player in India's burgeoning rental economy, has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), signaling its intent to go public on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This move comes as the company solidifies its position as India's largest online platform for furniture, appliance, and electronics rentals.

Founded in 2014 by Geetansh Bamania, Rentomojo has cultivated a technology-centric, direct-to-consumer model. The company's subscription-based service spans 22 Indian cities, catering to a substantial base of over 227,511 active subscribers. Industry estimates place Rentomojo's market share in the Indian furniture and appliance rental segment between 42% and 47%, underscoring its significant market penetration.

The proposed Initial Public Offering (IPO) is structured to raise approximately INR 1,100-1,200 crore (roughly US$128-140 million). This includes a fresh issuance of equity shares valued at up to INR 150 crore (approximately US$17.5 million), intended to fuel further expansion and operational enhancements. Additionally, existing shareholders will divest up to 2.84 crore equity shares through an Offer for Sale (OFS). The company may also explore a pre-IPO placement of up to INR 30 crore.

Rentomojo's financial trajectory shows robust expansion. Revenue from operations saw a significant increase, climbing from INR 123.28 crore in FY23 to INR 265.96 crore in FY25, effectively doubling within two years. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also demonstrated strong growth, rising from INR 27.14 crore in FY23 to INR 118.45 crore in FY25. Net profit experienced a remarkable surge, growing nearly sevenfold from INR 6.2 crore in FY23 to INR 43.11 crore in FY25, with a notable 92.3% year-over-year increase from FY24.

The IPO is being managed by lead underwriters Motilal Oswal Investment Advisors, Axis Capital, and IIFL Capital Services. Key investors participating in the OFS include Accel India, holding a 20.3% stake, Chiratae Ventures with 13.1%, Edelweiss Asset Management (10.2%), ValueQuest (8.7%), GMO Payment Gateway, and founder Geetansh Bamania himself, who retains a 17.7% stake. To date, Rentomojo has secured a total of INR 713.8 crore in prior funding rounds.

Funds generated from the fresh issuance are earmarked for strategic initiatives such as debt repayment, securing warehouse and experience store leases, expanding into new urban centers, enhancing its technology infrastructure, and general corporate needs. This expansion aligns with a broader market trend in India, where demand for flexible rental solutions is escalating due to increased workforce mobility and a preference for adaptable living arrangements.

However, the path to listing is not without potential hurdles. Reports indicate that a co-founder has initiated legal proceedings at the National Company Law Tribunal (NCLT), seeking to halt the IPO process. This legal challenge introduces an element of uncertainty as Rentomojo navigates its public market debut.