Rentomojo shares opened at Rs 482.45 apiece on the NSE, marking a premium of more than 19% over the IPO price of Rs 404 apiece. In less than an hour of its debut, the stock rallied sharply by over 9% to trade at Rs 526.70 apiece, adding more than Rs 460 crore to the company’s market capitalisation and taking it to nearly Rs 5,484 crore.
The strong market debut comes after Rentomojo’s Rs 1,255.57 crore IPO saw strong investor interest during its three days of public bidding, being subscribed 73 times its offer size between September 9 and September 11. Qualified institutional buyers (QIBs) led the demand, subscribing their reserved portion over 177 times. The portions kept for retail investors and non-institutional investors (NII) meanwhile, were booked around 16 times and 68 times, respectively.
The maiden public issue of the furniture and appliances renting platform comprised a fresh issue of shares worth Rs 150 crore, and an offer for sale of shares worth around Rs 1,106 crore by existing shareholders. A day before the IPO opened for public subscription, the company raised Rs 376 crore from 41 anchor investors.
“The company has delivered fabulous growth during the last two years, and we believe going forward… Rentomojo is a play on urban mobility.”
Sunny Agrawal, Deputy Vice President of Fundamental Research at SBI Securities
Rentomojo aims to use the fresh issue proceeds from the IPO for several key corporate purposes. A portion of the funds will go towards the repayment or prepayment, either in full or in part, of certain outstanding borrowings, along with the accrued interest on these loans. The company also plans to use part of the IPO proceeds to pay lease rentals and licence fees for its warehouses and experience stores. The remaining IPO proceeds will be utilised for general corporate purposes.
Sunny Agrawal, Deputy Vice President of Fundamental Research at SBI Securities, believes investors should continue to hold Rentomojo shares from a medium- to long-term perspective, given its position as an organised furniture and appliance rental platform in India, supported by a recurring subscription model and a growing subscriber base.
“Debt reduction from IPO proceeds is a positive structural driver, but until profitability and asset-utilization metrics show sustained improvement, the stock is better suited to a wait-and-watch approach rather than fresh accumulation at current levels.”
Shivani Nyati, Head of Wealth at Swastika Investmart
Rentomojo’s 19% listing pop has already priced in much of the near-term optimism, and at around 41x FY26 P/E, the valuation cushion remains thin, cautioned Shivani Nyati, Head of Wealth at Swastika Investmart. Debt reduction from IPO proceeds is a positive structural driver, but until profitability and asset-utilization metrics show sustained improvement, the stock is better suited to a wait-and-watch approach rather than fresh accumulation at current levels, according to the analyst, who suggested a stop loss at Rs 430 apiece, below listing price, to protect against the reversal of listing day gains.
Background
Rentomojo's IPO success reflects a growing investor interest in the furniture and appliance rental market, a sector that has been gaining traction in urban areas due to its flexibility and cost-effectiveness. The company's strong debut indicates confidence in its business model and growth prospects.
As Rentomojo continues to leverage its IPO proceeds for strategic growth, investors will be keenly watching for improvements in profitability and asset utilization metrics. The stock's future performance will likely depend on the company's ability to sustain its growth momentum and enhance operational efficiencies.
