Nazara founder Nitish Mittersain’s early Rentomojo bet set for 152X return as Rs 1,256-crore IPO opens…

The latest market report highlights that Rentomojo is set to make its equity market debut later this month, but the upcoming IPO is additionally set to unlock a massive windfall for some of the firm's early market participants. Among them is Nitish Mittersain, who is set to realise a return of more than 150 times the acquisition cost on the portion of his Rentomojo holding being sold through the initial public offering.

The Rentomojo IPO will open for subscription on September 9 and close on September 11. The firm has set the price range at Rs 384-404 per share, with the upper end valuing the furniture and appliance rental platform at around Rs 4,246 crore. The Rs 1,255.57-crore offering comprises a fresh offering of Rs 150 crore and an offer for sale (OFS) of around Rs 1,105.57 crore.

Mittersain is among the individual shareholders selling shares in the OFS. As stated by the firm's offer documents, he is offering 148,460 shares in the IPO. At the upper price range of Rs 404 per share, these shares will be worth approximately Rs 6 crore.

The Rentomojo offer documents show Mittersain holding 226,920 shares, with a weighted average acquisition cost of Rs 2.65 per share. The documents additionally note that the acquisition-cost figures have been adjusted for the firm's subsequent share split.

At the Rs 404 IPO price, the 148,460 shares being sold by Mittersain would fetch:

148,460 × Rs 404 = Rs 5.998 crore

Using the Rs 2.65 weighted average acquisition cost disclosed in the offer documents, the historical acquisition cost attributable to these shares works out to:

148,460 × Rs 2.65 = Rs 3.93 lakh

On this basis, the value of the shares being sold is around 152.45 times their acquisition cost.

In other words, the calculation indicates that the shares being sold in the IPO are worth roughly 152 times the weighted average cost at which they were acquired, before taxes, transaction costs and other expenses.

The implied earnings on this portion of the holding is approximately Rs 5.96 crore, based on the upper end of the IPO price range.

It is important to note that the Rs 3.93 lakh figure represents a proportionate acquisition cost derived from the RHP's disclosed weighted average acquisition cost. It should not be described as Mittersain's original investment amount in Rentomojo.

Mittersain was among Rentomojo's early market participants. He has previously described the investment as his first startup investment and stated the firm was valued at around Rs 12 crore when he invested.

Rentomojo has since expanded its business into a full-stack furniture and appliance rental and subscription platform. The firm operates across multiple cities and manages the asset lifecycle, including procurement, refurbishment, servicing, logistics and redeployment.

The jump in valuation is reflected in the firm's upcoming IPO. At Rs 404 per share, Rentomojo is seeking a valuation of around Rs 4,246 crore, almost five times the valuation at which it boosted private capital in 2024.

The IPO sale does not represent Mittersain's entire holding in the firm. Against his holding of 226,920 shares, he is selling 148,460 shares through the OFS. This leaves him with 78,460 shares after the IPO.

At the upper price range of Rs 404, the remaining stake would be worth approximately Rs 3.17 crore, assuming the stock is valued at the IPO price after stock-exchange debut.

The scale of the value creation becomes clearer when Rentomojo's early-stage valuation is compared with its proposed IPO valuation.

Mittersain's investment came when Rentomojo was still at an early stage, with the firm valued at around Rs 12 crore, according to his account. The firm is now approaching the public markets at a valuation of up to Rs 4,246 crore.

The RHP-based calculation as a result reveals how an early investment in the firm has translated into a substantial paper gain over the years.

The actual return realised after stock-exchange debut could, that stated, be elevated or softer depending on the market price of Rentomojo shares after they begin trading. The IPO is scheduled to list on the BSE and NSE, with the tentative stock-exchange debut date set for September 17.