Rentomojo Aims for Expansion through Subscription Model Amid Uncertain Job Market Projections

Rentomojo Limited Seeks ₹150 Crore in Fresh Issue Amid Uncertain Global Environment

Rentomojo Limited, an IPO-bound company, has filed its draft red herring prospectus (DRHP) seeking to raise capital through a fresh issue of up to ₹150 crore and an offer for sale of up to 2.84 crore equity shares. The company is betting on its profitable subscription-led model to deliver scale as global macro environment and employment outlook turn uncertain amid geopolitical tensions and artificial intelligence deployment.

Rentomojo operates a technology-driven rental and subscription platform for furniture and home appliances, and is the largest online player in the segment with an estimated 42-47 percent share of the organised market by subscription revenue in FY25, as per a Redseer report cited in the company's DRHP. The company's core bet is its subscription-led model, which converts large upfront purchases into recurring payments, offering revenue visibility and predictability. This model is supported by average subscription tenures of around 18 months and repeat usage of over 45 percent, helping drive stable cash flows.

The company has a significant presence in the market, with 227,511 live subscribers across 22 cities as of September 30, 2025, backed by a network of 21 warehouses and around 4.44 lakh sq. ft. of warehousing space, the DRHP showed. It also operates an omni-channel platform with 67 experience stores and a portfolio of more than 7.28 lakh live products.

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Rentomojo has turned profitable, reporting revenue of ₹265.96 crore and profit after tax of ₹43.11 crore in FY25. In the six months ended September 2025, revenue stood at ₹176.61 crore, while profit after tax rose to ₹61.38 crore, according to the filing. The company's integrated model, which combines subscription, e-commerce and re-commerce, along with its high asset utilisation and refurbishment-led redeployment, supports capital efficiency and margins.

Industry estimates cited in the DRHP peg India's furniture and appliances market at about ₹4.27 trillion in 2025, with rental still a low-penetration but growing category driven by urbanisation and rising mobility. The company plans to use the proceeds of the IPO for debt repayment, lease payments for warehouses and stores, and general corporate purposes.

Investment banks Motilal Oswal, Axis Capital, and IIFL Capital Services are managing the Rentomojo IPO. The company recently announced the appointment of three independent directors - Dr. Sandesh Kirkire, Dr. N S Rajan, and Ms Deepali Nair to its board of directors. These independent directors bring complementary strengths across finance and governance, people and ESG, and brand and digital growth, reinforcing the company's commitment to sustainable value creation and institutional maturity.

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