RentoMojo, a furniture rental startup, made a remarkable debut on the National Stock Exchange (NSE) with its shares listing at ₹482.45, a 19% premium over the initial public offering (IPO) price of ₹404. The stock quickly surged by 9% within the first hour, reaching ₹526.70, which boosted the company's market capitalization to nearly ₹5,484 crore.
The IPO, which raised ₹1,255.57 crore, was met with overwhelming demand, being subscribed 73 times over its offer size during the three-day bidding period from September 9 to September 11. Qualified institutional buyers (QIBs) showed the most interest, subscribing to their reserved portion over 177 times. Retail investors and non-institutional investors (NIIs) also participated actively, with their portions being subscribed around 16 times and 68 times, respectively.
The public issue consisted of a fresh issue of shares worth ₹150 crore and an offer for sale (OFS) of shares valued at approximately ₹1,106 crore by existing shareholders. Prior to the IPO's public subscription, RentoMojo secured ₹376 crore from 41 anchor investors.
The proceeds from the fresh issue are earmarked for several strategic purposes. A significant portion will be used to repay or prepay certain outstanding borrowings, including accrued interest. Additionally, funds will be allocated to cover lease rentals and license fees for the company's warehouses and experience stores. The remaining proceeds will be directed towards general corporate purposes.
As the first listed player in the rental category, the company is positioned as a leader in the organized furniture and appliance rental market in India, supported by a recurring subscription model and a growing subscriber base.
Investment experts have weighed in on the stock's performance and future prospects. Sunny Agrawal, Deputy Vice President of Fundamental Research at SBI Securities, advises investors to hold onto RentoMojo shares for the medium to long term, citing the company's growth trajectory and market position. He highlighted the company's potential as a play on urban mobility.
However, Shivani Nyati, Head of Wealth at Swastika Investmart, urged caution. She noted that the 19% listing premium has already accounted for much of the near-term optimism. At approximately 41 times the FY26 price-to-earnings ratio, she pointed out that the valuation cushion is thin. While the debt reduction from IPO proceeds is a positive structural driver, Nyati emphasized the need for sustained improvement in profitability and asset-utilization metrics before considering fresh accumulation of the stock. She suggested setting a stop loss at ₹430 per share to safeguard against potential reversals of listing day gains.
