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Summary: At the IPO price, Rentomojo is valued at about 40 times earnings, which for a category leader growing this quickly looks almost sensible. Then you look at what went into last year's profit. One line does a surprising amount of the work, and taking it out changes the question you should be asking.
Rentomojo, an online platform that rents home furniture and appliances to urban households on a monthly subscription, opened its IPO on September 9, 2026. Its IPO, raising Rs 1,256 crore, is almost an offer for sale, with just Rs 150 crore comprising a fresh issue.
Currently, the company leads its category, is profitable, and carries a book of contracted rentals worth three-quarters of a year's revenue. But its operating margin remains under pressure even as revenue doubled and every rupee of operating cash goes straight back into buying furniture.
What it sells
Rentomojo buys furniture and appliances, rents them out on monthly plans, takes them back when a subscription ends, then repairs and refurbishes each item in-house and rents it again. Delivery, installation, repairs, relocation and doorstep pickup are bundled into the fee. Subscribers order through the app or website, or walk into one of its 82 experience stores.
Almost all the money earned is rent, split between furniture at Rs 196 crore (50.6 per cent) and appliances at Rs 182 crore (47.2 per cent). The rest came from one-off delivery, installation and inspection charges collected at the point of service.
Rentomojo holds an estimated 42 to 47 per cent of organised home furniture and appliance rental revenue (excluding water purifiers). Live subscribers rose from nearly 1.5 lakh to 2.5 lakh in two years. The category grew from about Rs 350 crore in 2021 to about Rs 1,550 crore in 2025, and is expected to be roughly Rs 6,030 crore by 2030.
What the business gets right
#1 The subscription book gives it visibility
Rent accrues month by month, so a good part of it is booked before the year begins. Total contracted revenue, the full value of live subscription tenures, grew from Rs 243 crore in FY24 to Rs 707 crore in FY26. Of that, Rs 293 crore was still unbilled at the year-end, equal to 76 per cent of the whole of FY26's revenue. The average subscription runs about 18 months. That is unusual visibility for a consumer business, and it means growth does not depend on winning new subscribers continuously.
#2 The assets earn for a decade, not a season
Items bought in FY17 have already earned 5.1 times their original cost, and 56.1 per cent of them were still on rent as of FY26. The FY18 cohort has earned 4.5 times cost, with 60.9 per cent still earning. That longevity is bought cheaply: over six lakh refurbishments in FY26 cost Rs 19 crore against Rs 387 crore of revenue. Occupancy, the share of items actually with a paying subscriber, was 83.3 per cent.
What the business gets wrong
#1 The profit does not become cash
Rentomojo generated Rs 173 crore of operating cash in FY26 and spent Rs 176 crore on property, plant and equipment. Free cash flow, the operating cash left after buying assets, was negative Rs 3 crore, following negative Rs 23 crore in FY25 and negative Rs 57 crore in FY24. The mechanism is simple: revenue grows only when the item count grows, and every item must be bought before it earns.
#2 The funding is shorter than the assets
Working capital was negative Rs 91 crore on March 31, 2026, widening from negative Rs 33 crore two years earlier, on a current ratio of 0.6. Rs 96 crore of borrowings and lease payments fall due within 12 months against Rs 38 crore of cash and liquid investments. That money buys furniture, which is paid back over about 10 years, so the company must keep refinancing.
Rentomojo IPO details
| Particulars | Details |
|---|---|
| Total IPO size (Rs cr) | 1,256 |
| Offer for sale (Rs cr) | 1,106 |
| Fresh issue (Rs cr) | 150 |
| Price band (Rs) | 384-404 |
| Subscription dates | Sep 9 - Sep 11, 2026 |
| Purpose of issue | Rs 70 crore (repayment of debt); Rs 43 crore (payment of lease rental/licence fee for warehouses and stores); & general corporate purposes |
Post-IPO
| Particulars | Details |
|---|---|
| M-cap (Rs cr) | 4,246 |
| Net worth (Rs cr) | 446 |
| Promoter holding (%) | 13.4 |
| Price/earnings ratio (P/E) | 39.7 |
| Price/book ratio (P/B) | 9.5 |
Financial history
| Key financials | 2Y CAGR (%) | FY26 | FY25 | FY24 |
|---|---|---|---|---|
| Revenue (Rs cr) | 41.7 | 387 | 266 | 193 |
| EBIT (Rs cr) | 40.3 | 88 | 64 | 45 |
| PAT (Rs cr) | 118.4 | 107* | 43 | 22 |
| Net worth (Rs cr) | - | 296 | 184 | 140 |
| Total debt (Rs cr) | - | 233 | 192 | 167 |
| EBIT is earnings before interest and tax; PAT is profit after tax *FY26 includes a one-off deferred tax credit of Rs 37 crore. |
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Key ratios
| Key ratios | 3Y average (%) | FY26 | FY25 | FY24 |
|---|---|---|---|---|
| ROE (%) | 29.1 | 44.6 | 26.7 | 16.1 |
| ROCE (%) | 17.6 | 19.6 | 18.7 | 14.7 |
| EBIT margin (%) | - | 22.9 | 23.9 | 23.3 |
| Debt-to-equity (times) | - | 0.8 | 1 | 1.2 |
| ROE is return on equity; ROCE is return on capital employed | ||||
Operating metrics
| Particulars | FY26 | FY25 | FY24 |
|---|---|---|---|
| Live subscribers (lakh) | 2.5 | 1.9 | 1.5 |
| Items per subscriber | 2.8 | 2.7 | 2.6 |
| Average revenue per item (Rs) | 6,253 | 5,853 | 5,612 |
| Occupancy rate (%) | 83.3 | 82.8 | 86.4 |
| Unrecognised contracted revenue (Rs cr) | 293 | 142 | 68 |
| Capital expenditure (Rs cr) | 176 | 138 | 149 |
What the price is asking
At Rs 404 a share, Rentomojo is valued at about 40 times its adjusted FY26 earnings of Rs 107 crore, as Rs 37 crore of that came from a deferred tax credit, an accounting benefit with no bearing on the underlying business. Taxed normally at 25 per cent, FY26 profit would have been Rs 51 crore, which puts the price at close to 84 times. That is not a verdict on last year. It is a bet on the next four or five.
Margins fell from 23.9 per cent to 22.9 per cent in a single year, even as the business gained scale. Competition is the other check. Furlenco (34.5 per cent owned by listed Sheela Foam) generated Rs 370 crore of revenue and Rs 60 crore of profit in FY26, just behind Rentomojo on revenue.
The operating story is better than most that reach this market. But at 84 times earnings, that multiple has to be earned: sustained category growth, margins that hold and a share it does not cede. Until those come through, the price looks demanding.
Also read: The growth the market missed
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