With the Securities and Exchange Board of India (SEBI), Rentomojo files its Draft Red Herring Prospectus targeting ₹1,100-₹1,200 crore initial public offering (IPO). The move will be a significant step towards the Bengaluru-based startup as it will establish a bridge between the venture-driven company and the publicly traded companies.

It is reported that the company is targeting a valuation of between ₹5,000 and ₹7,000 crore at the time of its market, which will be the 2027 fiscal year.

Proceeds utilization and structure of the IPO

The initial public offering planned can be viewed as a mixture of fresh issue of shares and offer for sale (OFS) by the current investors. The company will issue new equity shares of up to ₹150 crore. The rest of the transaction is controlled by the offer of sale part, where current investors and pre-money contributors are anticipated to dispose of up to 28.4 million shares.

Accel, one of the leading venture capital firms that has long been involved in the platform, is one of the most significant stakeholders interested in this secondary selling operation. Other investors involved in the OFS include Chiratae Ventures, Bain Capital, and Edelweiss Discovery Fund.

The draft prospectus indicates that Rentomojo will use the net proceeds of the fresh issue to fulfill several important business purposes that will allow it to consolidate its financial status. One of the key goals is the repayment or prepayment of some outstanding borrowings and the interest to be paid on the borrowings.

The capital will be utilized in paying the operational expenses like lease rentals and license fees of its wide network of warehouses and experience stores. Through the elimination of debts and the strengthening of its physical infrastructures, the company will encourage its operational efficiency and enable it to continue its expansion strategy in urban India.

Financial performance and operational outlook

Rentomojo has positioned itself as a leader in the organized residential furniture and appliances rental industry. In the DRHP, the company cites data compiled through a Redseer report purporting that the company had a market share of between 42% and 47% in its industry, not including water purifiers.

On September 30, 2025, the platform had a strong subscriber base of more than 2.27 lakh live users located in 22 major cities in India. To support its online presence, Rentomojo has invested in a physical-digital approach to retail, with almost 67 brick-and-mortar physical experience outlets that it uses to create consumer trust and enable prospective clients to experience products firsthand before subscribing.

A history of increasing financial growth and profitability supports the move by the company to go public. The company has recorded its third annual profit, and the restated profit after tax of FY25 is ₹43 crore. The company has already shown a profit of ₹61.38 crore and a revenue of ₹176.61 crore in the first half of the 2026 fiscal year (ending September 30, 2025), which shows that the company has been moving in a positive direction in terms of its margins and market capture.

Conclusion

The filing with SEBI is placing Rentomojo in a larger group of Indian technology startups that seek to use the public markets to fuel the next phase of their expansion. The offering of a technology-based subscription business with physical retail presence has enabled the company to scale and remain profitable, a challenge that continues to be a primary concern of institutional investors.

Having Motilal Oswal Investment Advisors, Axis Capital, and IIFL Capital Services as the book-running lead managers, the company awaits regulatory approval.