Rentmojo IPO: SEBI approves Rs 150 crore fresh issue and OFS of 2.8 crore shares 

Rentmojo aims to deploy fresh proceeds towards repayment of its debt, paying off its license fee, and other general corporate purposes.

Here are three major components of the Rentmojo IPO:

#1 Rentmojo IPO: Issue size and lead managers

Of the total float, Rentmojo will raise Rs 150 crore via the issuance of fresh equity shares, and the promoter group will offload over 2.8 crore shares of Re 1 each via the OFS route. The total issue size has not been disclosed in the company’s DRHP.

Rentmojo may consider a pre-IPO placement of up to Rs 30 crore prior to filing its RHP.

The issue is being managed by Motilal Oswal Investments, Axis Capital, and IIFL Capital Services, while KFin Technologies is the registrar to the offer.

#2 Rentmojo IPO: Utilization of Proceeds

The online rental platform will deploy Rs 70 crore towards repayment and prepayment of certain outstanding borrowings availed by the company. For its in-house expenses, like payment of lease rental and license fee of its warehouses, Rentmojo will utilize Rs 42.50 crore of the raised capital.

The remaining amount will be allocated towards other general corporate purposes.

#3 Rentmojo IPO: Key risks

Over the past few years, the company has derived more than 95% of its revenue from renting out furniture and appliances, which makes the IPO vulnerable to the risks of revenue concentration. Also, fluctuations in the procurement of raw materials may adversely affect the company’s revenue.

Further, risks pertaining to subscriber retention, cybersecurity breaches, dependence on third-party transport services, failure to pay off debt, and a heavy customer base in tier-1 cities need to be watched out for.

About the company

Rentmojo is an Indian rental and subscription platform for home furniture and appliances. It is headquartered in Bengaluru, Karnataka.