Why:
- It grew about 50% a year with real profit in a category that killed every rival. Furniture rental bankrupted or buried GrabOnRent, Zefo and nearly Furlenco (₹260 crore of losses in two years before a rescue). Rentomojo compounded revenue from ₹120 crore to ₹266 crore over the same stretch and made ₹43 crore of profit in FY2025, earning about 25% before tax on the money actually deployed (T1).
- The race is back on. Furlenco, rescued by Sheela Foam in 2023, grew 64% in FY2025 and about 60% again in FY2026 to roughly Rentomojo's size, with similar reported profit (T2, parent commentary). Rentomojo won the last cycle; it now shares the category with a challenger compounding faster than it.
- Read the profit with care. Half of the latest half-year's ₹61 crore profit is a one-off tax entry, and FY2024-25 profits were lifted by two extensions of assumed furniture life worth ₹15 crore together, all disclosed (T1). Underlying operating margin has been flat at 22 to 24% since FY2024, and each rupee of new revenue takes about ₹1.9 of borrowed capital spending.
The story
Rentomojo rents beds, sofas, fridges and washing machines to young renters on monthly subscriptions of about ₹1,300, keeps each item earning for up to a decade across several tenants, and does all the delivery, repair and refurbishment itself. The engine is the book in its ten biggest cities, 94% of revenue. What a buyer is buying is that annuity machine, plus a bet that many more Indians start renting furniture instead of buying it. What they should not buy is the headline half-year profit, half of which is a one-off tax entry.
What this business is
The company buys furniture and appliances (increasingly made under its own label by Dixon and others), rents them to 227,511 subscribers across 22 cities, and services them through 21 warehouses, 67 stores and 1,688 in-house technicians. Delivery now takes 2.5 days on average, repairs are free within about two days, and moving cities with your rented furniture is free. Revenue is 98% recurring subscription (T1).
The economics are the point. An item costs about ₹8,500 to buy and earns about ₹5,900 a year in rent; items bought in FY2017 have already earned 4.9 times their cost and most are still earning (T1, a figure that covers only the categories still offered). Customers' deposits fund part of the stock, so working capital is negative. The offsetting fact: the fleet must be financed up front, so the company has never produced free cash after interest, and net debt has grown to ₹168 crore (T1).
Easy or difficult business? Operationally hard, and the graveyard proves it. Renting out a sofa means underwriting the tenant, moving the sofa, fixing it, taking it back and re-renting it, profitably, thousands of times a month. Everyone else who tried at scale lost money for a decade; one shut down, one sold itself cheap. Rentomojo is the one operator that made the machine pay. Nothing about it is protected by a patent or licence, and a rebuilt Furlenco is now running the same machine at the same size, faster.
Key numbers
| ₹ cr | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenue | 120 | 193 | 266 |
| Revenue growth % | n/a | 60.5 | 38.0 |
| EBITDA | 53 | 78 | 118 |
| EBITDA margin % | 42.7 | 39.9 | 43.6 |
| PAT | 4 | 22 | 43 |
| PAT growth % | n/a | 408.2 | 92.3 |
Profit grew far faster than revenue, and much of that was not operations. The company exited an expensive lease-in structure in FY2024, extended assumed asset lives twice (adding ₹9 crore to FY2024 profit and ₹6 crore to FY2025), and booked a ₹33 crore one-off tax credit in the FY2026 half-year, all disclosed (T1). Measured cleanly, operating margin has sat at 22 to 24% of revenue since FY2024, which is already above what mature rental companies abroad earn. The first half of FY2026 brought ₹177 crore of revenue and ₹29 crore of pre-tax profit (T1).
| Where the money comes from, ₹ cr | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Ten biggest cities | 102 | 169 | 251 |
| Ten biggest cities growth % | n/a | 65.1 | 49.0 |
| Rest of India | 18 | 24 | 15 |
| Rest of India growth % | n/a | 34.0 | -38.9 |
The filing reports a single operating segment and no split between furniture, appliances and water purifiers (T1). The city table above uses the ten biggest cities as of September 2025. The rest-of-India dip reversed in the FY2026 half-year, which at ₹17 crore already beats all of FY2025 as new cities like Indore and Lucknow ramp (T1).
Scorecard
| Block | Rating | Why |
|---|---|---|
| Right to win | PASS | The customer's reason is real: a furnished home for a 1.6-year tenancy at roughly a third of the upfront cash of buying, delivered in 2.5 days, fixed free in about two, moved free between cities. The numbers show it working: delivery time halved, app rating up every year to 4.53, average stay lengthening to 18.8 months, repeat share of orders jumping to 52%, and items earning 4.9x their cost over a decade (T1). The hard proof is survival: it makes money in a business that broke everyone else. Two limits keep this from more: Furlenco is now at parity and growing faster, and the 4.9x cohort figure excludes the categories Rentomojo itself exited. |
| Industry and TAM | PASS | Renting is about 1% of what urban India spends furnishing homes, so the ceiling is far away. But the market as it exists is small (organised pool near ₹600 crore, of which Rentomojo already holds roughly 45%), so growth needs the category itself to keep compounding. The issuer's paid study says 31% a year to CY2030 (T3); outside estimates run 10 to 25% (T2/T3). |
| Financial momentum | MARGINAL | Real profit at stable margins and about 25% pre-tax returns, but each rupee of new revenue costs about ₹1.9 of capital spending, free cash after interest has been negative every year, the reported jump was flattered by accounting changes and a one-off tax credit, and growth is slowing (60% to 38%) in step with the category. |
| Risks, governance, RPTs | MARGINAL | Clean on paper: zero promoter pledge, related-party totals under 4% of revenue, Deloitte unqualified for three years (T1). But an ex-director's NCLT case says the company-funded staff trust bought his shares cheap, and the filing's own numbers put that purchase near ₹11,400 a share against ₹85,000 in arm's-length trades weeks later (T1). Three investor directors left the board days before filing. The case is unheard and SEBI has issued its observations regardless (T1/T2). |
| Promoter and cap table | PASS | One founder, fourteen years, never sold a share, nothing pledged; revenue doubled in two years while debt-to-equity fell from 4.2x to 0.7x; investors re-upped across seven rounds and outsiders paid rising prices as late as February 2026 (T1). A July 2025 rights issue handed him about 5% of the company at face value with no reason stated, a large and unexplained sweetener, though no company cash left. |
| Offer structure | PASS | ₹150 crore of fresh money repays loans that bought the rental fleet and retires lease dues; nothing goes to promoters and general purposes stay under the cap (T1). The founder sells 13.5% of his stake, his first sale ever; eleven-year funds trim minority slices. The honest label: mostly an exit, since the sale shares will outweigh the fresh money at any plausible price, and none of the fresh money buys new assets. |
Watch out for
- The NCLT case is the overhang. A former director wants the IPO blocked and the founder removed, over 2,223 shares the company-funded staff trust bought from him in 2023. The filing never prints the purchase price as a price, but its own accounts imply about ₹11,400 a share, against ₹85,000 paid in ordinary trades months later (T1). The petition sits unheard since March; SEBI still issued observations in July 2026 (T2).
- The tax numbers contain a contradiction the RHP must resolve. One table says only ₹10 crore of carried-forward business losses remain; the tax credit's own arithmetic implies about ₹172 crore. One of the two is wrong, and the ₹33 crore credit that is half the latest profit rests on it (T1).
- The board changed shape in the filing month. Three investor-nominated directors resigned in early March 2026, the founder became Chairperson between those resignations, and the independent directors and CFO are all appointments of January to March 2026 (T1).
- Growth is expensive and the replacement bill is ahead. Every rupee of new revenue has taken about ₹1.9 of capital spending, the fleet is young, and items bought in the FY2024-25 surge will need replacing together. Occupancy fell from 91% to 83% before steadying (T1).
- The market's growth rate is the thesis. If the paid study's 31% holds, holding share is a fourfold by 2030. Independent estimates as low as 10 to 18% would make this a slow double instead (T2/T3).
The offer
- Raising ₹150 crore of fresh money, plus an offer for sale of up to 2.84 crore existing shares, 28% of the company; the sale's rupee value depends on a price band that does not exist yet (T1).
- For repaying ₹70 crore of bank loans that financed the rental fleet and ₹42.5 crore of lease dues on existing warehouses and stores; no new assets are funded (T1).
- Implied valuation: the last price anyone paid was ₹324.7 a share in February 2026, which puts the company near ₹3,290 crore (T1). That trade was 0.68% of the shares, a thin trade and a weak anchor.
- Promoters: the founder holds 14.7% before the offer and sells 13.5% of that, leaving under 12.7% even before new-share dilution. Five large investors lend their shares to meet the 20% promoter lock-in the founder cannot fill alone (T1).
Assessment of the Draft Red Herring Prospectus dated 27 March 2026 under the orchestrated process. Outside checks of competitor results, market estimates and case status were made and are marked where used (T2/T3). Numbers carry source tiers: (T1) the filing's audited sections, (T2) established outside reporting with a named source, (T3) the issuer-commissioned industry chapter or press. Not a recommendation. No price band exists at this stage, so nothing here is a valuation view.