Rentomojo Limited (May Subscribe)

Highlights

Rentomojo Limited (Rentomojo) incorporated in 2012, is a full-stack direct-to-consumer (D2C) online rental and subscription platform for furniture and appliances in India. Their integrated asset lifecycle model, spanning across category management, designing, procurement, refurbishment, servicing, reverse logistics and multi-cycle redeployment, helps them deliver a flexible living experience to modern age consumers of India.

Rentomojo platform, operating through an omni-channel mechanism, combining online ordering platform and experience stores (82 experience stores), enables consumers to access furniture and appliances on a flexible subscription plan, thus eliminating the need for large upfront purchases, repair and maintenance hassles, relocation concerns, limitations on upgrading products and long-term ownership commitments.

Rentomojo has a comprehensive portfolio of 851,184 live items (Products) across furniture and appliances and had consistently maintained an occupancy rate of 82 pct+. Further, they had 253,825 live subscribers, enabling subscribers to access home essentials through affordable, long-term and flexible subscription plans backed by a reliable and a full-stack asset-lifecycle model.

Out of the total proceeds of Rs. 12,560 mn, Rs. 700 mn would go towards prepayment and/or repayment, of all or a portion of certain outstanding borrowings availed by the company. ~Rs. 425 mn would go towards payment of lease rental/ license fee for their warehouses and experience stores. ~Rs. 375 mn would go towards general corporate purpose. Additionally, Rs. 11,060 mn going towards investors selling shareholders of the company.

Key Highlights

• The home furniture and appliances rental industry in India represents a large and rapidly expanding opportunity, with a total addressable market (TAM) of ~Rs, 695.2 bn in CY25. This market is expected to grow at a CAGR of 11 pct to reach ~Rs. 1,172.1 bn by CY30, driven by India’s young demographic profile, rising consumption and urban migration, growing rental housing penetration.

• The company is a market leader in the organised home furniture and appliances rental market (excluding water purifiers), commanding ~42 pct – 47 pct share in terms of subscription revenue in FY25 and accounting for more than half (50 pct – 55 pct) of the live subscribers in the overall home furniture and appliances rental market (excluding water purifiers) as of H1FY26.
• Rentomojo’s business model is uniquely positioned at the intersection of e-commerce, subscription, and re-commerce, creating a self-reinforcing flywheel that simultaneously enhances consumer value and drives structural efficiency and capital productivity for their platform.
• As a result of their refurbishment capabilities and end-to-end ownership of the asset lifecycle, they are at a stage where they are positioned to deliver structurally attractive economics over time, with older asset cohorts able to generate higher cumulative returns as they progress through multiple cycles of redeployment – an advantage that is uniquely enabled by end-to-end ownership of the asset lifecycle and one that they have already realised across multiple asset vintages.
• The company is one of the few Indian D2C product commerce brands and platforms to have demonstrated consistent profitability, over the 3 three years supported by efficient unit economics, high asset utilization, efficient capital allocation and a multi-cycle asset-lifecycle model that extends product life and enhances margins.
• LPL’s key growth strategies include (i) To Leverage micro-market intelligence to drive omni-channel expansion and strengthen consumer trust (ii) Capital-light expansion to capture urbanization driven growth (iii) Invest in technology stack to enhance customer experience, strengthen operational efficiency, and drive cost optimization (iv) Strengthen and scale platform solutions to provide a wider breadth of services.
• The sales of the company have grown by 47.7 pct CAGR over FY24-26 and EBITDA/profit has grown 44.6 pct CAGR/115.7 pct CAGR over same year. In FY26 the company reported sales of Rs. 3,870 rose 45.5 pct YoY. EBITDA of the company increased 38 pct YoY to Rs. 1,635 mn. In FY26 the company posted profit of Rs. 1,043 mn, up 142 pct YoY.

Key Risk

• Rentomojo’s sales is concentrated in key tier-1 and metropolitan markets in India. Adverse local developments could disproportionately impact their business.
• Rentomojo’s operations involve the storage, refurbishment, and movement of assets through and within the warehouses. They have experienced a fire at one of warehouses in June 2026, and any incident such as fire, natural calamity or operational disruption at these locations could result in asset damage, temporary suspension of operations.

• Rentomojo’s operations are manpower intensive and if they are affected by work stoppages or increased wage demands, and if they are unable to engage current and new employees and contractors on commercially acceptable terms, their business and operations may be adversely affected.

Financial Performance

Source: – RHP.

Valuation

Rentmojo is one of the few Indian D2C product commerce brands and platforms to have demonstrated consistent profitability, over the last 3 years supported by efficient unit economics, high asset utilization, efficient capital allocation and a multi-cycle asset-lifecycle model that extends product life and enhances margins. Their business model is anchored in their subscription agreements, which renew monthly with auto-renewal provisions embedded in the contract structure, and many of which have long tenures that generate predictable and recurring revenue streams. At the upper end of the price band of Rs. 404, the issue is priced at an PE of 40.7x of its FY26 post issue capital. The issue appears to be fully priced. However, only high risk investor can subscribe this issue for listing gains.

Disclaimer: The views shared in blogs are based on personal opinions and do not reflect the company’s views. Investment involves risk, and it is advisable to consult a financial advisor before making any investment through the app. The decision to invest is solely that of the investor, and the company or its communication cannot be held responsible for it.