Rentomojo IPO

Rentomojo leads India’s organised rental market (excluding water purifiers), with a huge 42% to 47% share of subscription revenue. This scale gives it strong network benefits and a market-leading base of 253,825 live subscribers as of March 31, 2026.

Rentomojo’s re-commerce model lets it refurbish and rent out the same products multiple times, helping it get more value from every asset. Older asset batches from FY17 and FY18 have generated revenue of 5.12 times and 4.49 times their original cost, respectively, with more than 50% of these assets still earning rental income today.

Unlike many digital platforms, Rentomojo has efficient unit economics (how much it earns versus what it spends to serve each customer) and rapidly improving profits. Its profit after tax jumped from ₹22.41 crore in FY24 to ₹104.30 crore in FY26, a compounded annual growth rate of 115.72%. FY26 profit included a ₹36.64 crore deferred tax credit, but even excluding this, profit before tax rose to ₹67.66 crore, showing strong underlying growth.

Rentomojo’s monthly rental model guarantees steady, predictable income. In FY26, it already had ₹292.57 crore in locked-in future contracts. This is guaranteed revenue that the company will collect and count as customers use their rented items over time.

Strong asset utilisation and tight cost control help Rentomojo generate healthy returns on the money invested in the business. Its adjusted Return on Capital Employed (ROCE), which shows how efficiently the company uses its capital to generate operating profits, stood at a strong 25.34% in FY26 and 25.14% in FY25.

Rentomojo’s brand helps it attract customers without having to spend heavily on advertising. In FY26, 61.37% of its total website traffic came organically, meaning these users found Rentomojo without clicking on paid ads. This helps keep its customer acquisition costs lower.

Rentomojo has expanded its own private-label products to lower upfront supply costs and have more control over quality. It partnered with Dixon, India’s largest electronics manufacturer, to make washing machines and refrigerators. This also helps Rentomojo offer products such as water purifiers at affordable monthly rentals of ₹391.

Rentomojo’s business is almost entirely built around renting furniture and appliances. This segment contributed 97.90% of its total operating revenue in FY26. So, if demand for rentals falls, its revenue, profits, and cash flows could take a serious hit.

Since customers pay rent every month after the products are delivered, Rentomojo faces the risk of customers not paying on time. As of March 31, 2026, undisputed trade receivables that were credit-impaired (payments overdue by more than 180 days) stood at ₹21.89 crore, pointing to a meaningful collection problem.

Rentomojo relies heavily on debt to fund its large rental inventory. As of June 30, 2026, its total consolidated borrowings stood at ₹258.33 crore. The interest cost on these loans eats into cash flows and leaves the company with less flexibility if market conditions change.

Rentomojo depends heavily on a handful of major cities, so a slowdown, stronger local competition, or infrastructure problems in these markets could hurt its cash flows. Its top 10 cities generated ₹346.38 crore in FY26, accounting for a massive 89.51% of total operating revenue.

Rentomojo also faces a short-term liquidity risk because its borrowings and rental assets have very different timelines. More than 38.52% of its current liabilities in FY26 were short-term debt maturities, while the assets bought with this money generate rental income gradually over a useful life of up to 10 years.

As Rentomojo’s subscriber base grows, the amount it sets aside for expected credit losses is also increasing, putting pressure on margins. Its accumulated allowance for credit losses on trade receivables rose from ₹14.88 crore in FY24 to ₹24.91 crore in FY26.

Rentomojo operates 20 warehouses that hold large amounts of wooden furniture and electronic products, exposing its inventory to risks such as fires and other disasters. The company actually experienced a warehouse fire in June 2026. Such events can disrupt operations, lead to large asset losses, and potentially hurt its brand reputation.