Rentomojo IPO Review: 88% OFS, Which Year Profit

Company: Rentomojo Ltd · Bengaluru · subscription rental of furniture, appliances and electronics across 29 cities · mainboard IPO, NSE and BSE

Key takeaways

• The book opens 9 Sep 2026: ₹1,255.57 crore, of which ₹150 crore is fresh and ₹1,105.57 crore is OFS — 88% of the issue.
• Fresh proceeds: ₹70 crore to repay debt, ₹42.50 crore for warehouse and store leases. That is a balance-sheet tidy-up, not a growth raise.
• FY26 reported PAT was ₹104.30 crore on total income ₹394.09 crore. ₹36.6 crore of that PAT is a one-time tax credit. Ex-credit PAT is about ₹67.6 crore.
• At ₹404, post-issue mcap is ₹4,246 crore: 40.73x reported FY26, about 63x ex-credit. There is no listed Indian rental peer.
• An unofficial GMP of about ₹142 was quoted on 7 Sep (~35%) — unofficial, unregulated, often wrong.

The deal in one paragraph

Rentomojo rents furniture and appliances to 2.54 lakh live subscribers across 29 cities. Occupancy is 83%. Three reported profit years are in the coverage. The offer still has two facts that do more work than the brand: 88% of the ₹1,256 crore is an exit for Accel, Chiratae, Edelweiss, ValueQuest and the founder, and the 41x multiple uses a year that includes a ₹36.6 crore tax credit. Strip the credit and the same ₹4,246 crore is ~63x a rental book with no listed clone. Our verdict is avoid at ₹404; the reasoning is below.

Data

Issue structure

Item	Figure	Units
Total issue	1,255.57	₹ cr
Fresh issue	150.00	₹ cr
OFS	1,105.57	₹ cr
Price band	384–404	₹ / share
Lot	37	shares (₹14,948 at the cap)
Debt repayment	70	₹ cr of fresh
Leases / licences	42.50	₹ cr of fresh
Window	9–11 Sep 2026	opens tomorrow
Listing (tentative)	17 Sep 2026	NSE + BSE

Source: Outlook Money; Entrackr. Sellers include Accel India (DRHP 20.92%), Geetansh Bamania (14.69%), Chiratae / IDG (13.69%), Edelweiss Discovery (10.53%), ValueQuest (8.92%).

Of the ₹150 crore fresh, ₹70 crore repays debt and ₹42.50 crore funds warehouse and store leases.

Units: ₹ cr · Source: Outlook Money; Entrackr

Financials (₹ cr)

	FY24	FY25	FY26
Total income	195.80	271.96	394.09
Revenue from operations	—	266	387
EBITDA margin	—	43.55%	41.48%
PAT (reported)	22.41	43.11	104.30
Tax credit inside PAT	—	—	36.6
PAT ex-credit	22.41	43.11	~67.7
Net worth	139.61	—	295.81
Borrowings	147.22	—	187.59
D/E	—	0.84	0.63
Live subscribers	—	—	2,53,825
Occupancy	—	—	83.34%

Units: ₹ crore except ratios and counts. Source: Outlook Money; Entrackr; StartupFox. FY24 operating revenue and operating cash flow were not in the notes I used. Performance marketing rose 86% in FY26 while EBITDA margin slipped (StartupFox).

Units: ₹ crore · Source: Outlook Money; Entrackr

FY26 reported PAT includes a one-time ₹36.6 crore tax credit; the two series are identical until that year.

Units: ₹ crore · Source: Outlook Money; StartupFox

Valuation at the upper band

Metric	At ₹404
Post-issue mcap	₹4,246 cr
Diluted EPS (post)	₹9.92
P/E on reported PAT	40.73x
P/E on PAT ex-credit	~62.8x
P/B	14.10x
Listed rental peer	none

Units: rupees crore and times. Source: Outlook Money; StartupFox. Both multiples are true; they measure different earnings.

There is no listed Indian rental peer to put beside these bars; the same ₹4,246 crore market cap is priced on two different earnings numbers.

Units: times (x) · Source: Outlook Money; StartupFox

Subscription and unofficial GMP

The book is not open yet (anchor 8 Sep; public 9–11 Sep). Outlook Money on 7 Sep quoted an unofficial GMP of about ₹142 versus ₹404 (~35% / ~₹546). Grey-market prints are informal and often wrong.

Risks

• 88% OFS. Funds and the founder are selling; the company keeps ₹150 crore, mostly for debt and rent.
• Which year’s profit. 41x reported versus 63x without the tax credit.
• No listed peer to borrow a multiple from.
• Asset-heavy rental: utilisation, refurbishment, warehouses, Dixon / private-label execution.
• Marketing grew faster than revenue; margin already narrowed.
• Operating cash flow unverified in the secondary notes.

AlphaResearch verdict

Avoid at ₹404. Clears 1 of 5 checks (business). Numbers are partial because of the tax credit and missing operating cash. Price and OFS fail.

Avoid at ₹404Clears 1 of 5

1. ✓Business · ClearsWorking rental franchise: 2,53,825 live subscribers across 29 cities at 83.34% occupancy.
2. ~Numbers · PartialThree reported profit years, but FY26 PAT of ₹104.30 crore includes a ₹36.6 crore tax credit; operating cash flow unverified.
3. ✗Price · Fails40.73x reported, ~62.8x ex-credit, with no listed rental peer to anchor either.
4. ✗Structure · Fails₹1,105.57 crore of ₹1,255.57 crore (88%) is an OFS by funds and the founder; the ₹150 crore fresh goes to debt and leases.
5. ✗Red flags · FailsPerformance marketing up 86% while EBITDA margin slipped 43.55% → 41.48%; asset-heavy rental book.

Why: 2.54 lakh live subscribers at 83% occupancy is a working rental franchise. But 88% of the ₹1,256 crore is an exit for Accel, Chiratae, Edelweiss, ValueQuest and the founder, and the headline 41x uses a year that includes a ₹36.6 crore tax credit. Strip the credit and you are paying ~63x for a rental book with no listed clone to price it against. Sellers know the business better than buyers do; at this multiple, that asymmetry decides it.

What flips this verdict: two quarters of PAT without a tax-credit crutch and occupancy still at or above 83% moves us to Neutral. A live price nearer 25–30x on ex-credit FY26 earns a full re-read.

Dates: anchor result 8 Sep; book 9–11 Sep; listing tentatively 17 Sep 2026.

A companion video is planned; it will quote only this article and docs/ipo_analysis/rentomojo.md.

Disclaimer

AlphaResearch is not a SEBI-registered investment adviser or research analyst. The verdict in this article is AlphaResearch’s independent opinion, formed from publicly available information as of the date shown; it is not personalised investment advice and does not consider your financial situation, goals or risk tolerance. Figures are taken from the sources listed below and may contain errors; verify them in the original filings. Investing in securities involves risk, including loss of principal. Consult a SEBI-registered adviser before acting on anything here.

Position disclosure: none.