Fourteen-year-old furniture and appliance rental platform Rentomojo’s ₹1,256-crore IPO opened on September 9 and will close on September 11. The price band is ₹384-404 a share, valuing the company at about ₹4,246 crore at the upper end. The IPO has been subscribed 103 per cent so far.
The issue comprises a fresh issue of ₹150 crore and an offer for sale of about ₹1,106 crore. Accel India, Edelweiss Discovery Fund, IDG Ventures, ValueQuest S.C.A.L.E. Fund, GMO and Geetansh Bamania (founder & CEO), among others, are participating in the OFS. Post issue, promoter group stake would fall to about 20 per cent.
Of the fresh proceeds, ₹70 crore will go towards repayment of borrowings and accrued interest, which should reduce finance costs, while ₹42.5 crore will fund lease rentals and licence fees for warehouses and experience stores. As of June 30, 2026, Rentomojo had total outstanding borrowings of ₹258.3 crore on a consolidated basis.
There is much to like operationally. Revenue from operations doubled from ₹193 crore in FY24 to ₹387 crore in FY26, a 42 per cent CAGR. EBITDA rose from about ₹78 crore to ₹163 crore and EBIT, or operating profit after depreciation, from about ₹48 crore to ₹93 crore.
Rentomojo had 2.54 lakh live subscribers in FY26, up about 31 per cent year-on-year, while repeat orders accounted for about half of orders. More than 83 per cent of available products were rented out. Operating cash flow of about ₹173 crore also almost covered ₹176 crore spent on property, plant and equipment.
The question is not whether Rentomojo has built a credible business. It certainly has. The issue is whether the IPO price leaves enough room if growth slows.
FY26 PAT of ₹104 crore included a ₹36.6-crore deferred-tax credit. Excluding this non-cash benefit, profit was about ₹67.7 crore. The FY26 tax credit will not recur in the same way. Future PAT will also increasingly reflect normal tax charges as the company uses up its available tax benefits. Thus, even if operating profit grows strongly in FY27, PAT need not grow at anything close to the FY26 rate.
For an asset-owning rental business, EV/EBIT is more useful than looking only at P/E or EBITDA. At ₹404, Rentomojo is valued at around 46 times FY26 EBIT. Even if FY27 revenue grows 30-35 per cent and margins hold, the multiple would fall only to around 34-35 times, which is still at a premium.
Global comparisons, though not like-for-like, also point to a chunky premium being demanded. Bloomberg data show Upbound Group (Rent-A-Center, Acima) and PROG Holdings (Progressive Leasing) trade at roughly 11 times trailing EV/EBIT, although revenue growth has been slower and net margins thinner.
At these valuations, investors can also own some listed consumer-durable makers at lower operating-profit multiples, rather than pay a scarcity premium for the business that rents their products.
In conclusion, investors can skip the Rentomojo IPO and monitor the company after listing, as we wait for stronger evidence of cash generation in a still-niche market where rentals account for only about 1 per cent of furniture volumes and 1.4 per cent of appliance volumes.
Business
Rentomojo rents furniture, appliances and water purifiers across 29 cities, mainly to younger, mobile urban households. The average subscription period has been around 18 months. The same product can then be repaired and rented to another customer. Rentomojo competes with Rentickle (AVA Lifestyle Products & Services), CityFurnish, Furlenco (House of Kieraya) etc.
The model works particularly well for people who relocate frequently and do not want to buy bulky household goods. Rentomojo’s older products provide encouraging evidence — products bought in FY17 have generated cumulative revenue exceeding five times their original purchase cost.
Execution is also strong. Delivery turnaround is about 2.4 days, more than six lakh products were repaired and prepared for reuse in FY26, and items per user increased from 2.61 in FY24 to 2.83 in FY26.
But customer acquisition needs watching. Performance marketing spend jumped 86 per cent to about ₹21 crore in FY26, far ahead of the 31 per cent growth in live subscribers.
Growth questions
Rentomojo is essentially an urban mobility play. Its natural customer is a renter who moves cities or homes for work and values flexibility over ownership. Redseer estimates that Metro and Tier-1 cities account for more than 77 per cent of the addressable rental opportunity.
That raises an important question: can expansion into many more cities produce the same economics as Bengaluru, Delhi-NCR, Mumbai and other large employment centres? Smaller cities generally have lower job mobility and higher home ownership, so simply adding cities may not produce proportionate growth.
There is also a risk of saturation in mature urban markets. The rental model has benefitted from strong job switching and workforce mobility; Redseer cites job switching growing at about 22 per cent CAGR between FY21 and FY25. If white-collar job creation and mobility slow, rental demand may not expand at the pace implied by current valuations.
Subscriber growth therefore becomes crucial. Live subscribers grew about 31 per cent in FY26, while revenue grew 45.5 per cent, helped additionally by higher items per user and revenue per item. There is, however, a limit to how much these two factors alone can sustain growth. Sustaining 30-35 per cent revenue growth will increasingly require a healthy pace of new customer additions as well.
The positive side is that Rentomojo already has a 42-47 per cent share of organised furniture and appliance rental revenue, older assets can keep earning without equivalent fresh spending, and its Dixon partnership for private-label appliances could improve sourcing economics.
These are good reasons to keep the company on the watchlist. They are not, at the current valuation, enough reason to buy the IPO.
Published on September 9, 2026
