Rentomojo IPO pairs rapid growth with a steep 46x FY26 EV/EBIT valuation
The ₹1,256 crore IPO follows Rentomojo’s revenue rise to ₹387 crore in FY26 from ₹193 crore in FY24, with live subscribers up 31% to 2.54 lakh. The review flags valuation, higher customer-acquisition costs, a deferred-tax boost to profit and expansion risks beyond major metros.
What happened
Rentomojo’s ₹1,256-crore IPO highlights strong FY24-FY26 revenue and operating-profit growth, high rental utilisation and market leadership. However, the review
Key facts
- ₹1,256 crore IPO
- Price band ₹384-404 per share
- Fresh issue ₹150 crore; OFS about ₹1,106 crore
- FY26 revenue ₹387 crore, up from ₹193 crore in FY24
- FY26 EBITDA ₹163 crore; EBIT ₹93 crore
- FY26 live subscribers 2.54 lakh, up 31% YoY
- FY26 PAT ₹104 crore, including ₹36.6 crore deferred-tax credit
- Valuation about 46x FY26 EV/EBIT
- 42-47% share of organised furniture and appliance rental revenue
Why this matters
Rentomojo’s scaled subscriber base makes rental furniture strategically relevant, but prospective partners or acquirers should scrutinize metro expansion economics, customer-acquisition efficiency and normalized profitability.
What to watch
- Quarterly live-subscriber growth versus the reported 31% year-on-year pace.
- Revenue growth relative to subscriber growth, indicating changes in ARPU, tenure or utilization.
- CAC trend, marketing spend as a share of revenue and CAC payback period.
- EBIT margin and operating cash-flow conversion after excluding deferred-tax effects.
- Churn, renewal rates, customer defaults and furniture loss/damage provisions.
- Inventory capex, asset turns, refurbishment costs and resale recoveries.
- Share of revenue from non-metro markets and whether those cohorts reach metro-like contribution margins.
- Post-listing valuation performance and any peer or investor pressure for faster profitability.
- Prioritize city-level cohort disclosure, including CAC payback, retention, average subscription duration and contribution margin.
- Use IPO proceeds to deepen high-density metro clusters before pursuing broad geographic expansion.
- Tighten underwriting, deposit policies and collections analytics to limit customer-default and asset-loss costs as the subscriber base expands.
- Increase refurbishment, resale and reverse-logistics efficiency to improve furniture asset utilization and residual-value recovery.
- Frame investor guidance around EBIT and operating cash flow excluding deferred-tax benefits, rather than headline profit growth.
- Monitor competitors' pricing and promotional intensity, as a funded post-IPO rival could raise category-wide acquisition costs.