Shares of Rentomojo, the Bengaluru company that rents furniture and home appliances by monthly subscription, rose as much as 10% to a record INR 650 on Wednesday after its first quarterly results as a listed company showed revenue up about 53% from a year earlier.

The move puts the stock roughly 60% above the INR 404 price of its initial public offering in September. For investors who have poured money into India's crowded new-issue market this year, Rentomojo is an early test of whether consumer startups that listed at rich valuations can back them up with earnings. Its first report showed fast sales growth and steady margins, while a tax swing cut headline profit.

Revenue grows, profit falls on tax

Revenue from operations rose to INR 1.42 billion in the three months to Sept. 30, the second quarter of India's fiscal year, from INR 930 million a year earlier, according to Business Standard. Entrackr, which reviewed the filing, put the growth at 53% and said other income of INR 16 million lifted total income to INR 1.44 billion.

Net profit fell 63% to INR 181 million from INR 486 million. The drop was mostly about tax. Rentomojo booked a tax expense of INR 62 million in the quarter, while a year earlier it recorded a deferred tax credit of INR 328 million that inflated that period's profit, Business Standard reported.

Before tax, the business improved. Profit before tax rose 54% to INR 243 million from INR 158 million, Entrackr said. Earnings before interest, tax, depreciation and amortization climbed to about INR 580 million from INR 376 million, with the margin roughly flat at around 40% as operating costs grew in step with sales.

Total expenses rose about 54% to INR 1.2 billion from INR 780 million, according to Entrackr, with employee costs of INR 195 million. For the six months to September, revenue rose about 52% to INR 2.68 billion from INR 1.77 billion, and profit before tax was INR 285 million.

A volatile session, then a record

The stock's path on Wednesday was not a straight line. It opened at INR 600.35 on the BSE, slipped to an intraday low of INR 575, down nearly 3%, and then reversed to hit INR 650, Business Standard reported. By 2 p.m. in Mumbai it traded 4.8% higher at INR 620.

Trading was heavy. Volume on the BSE ran more than 12 times its usual level, and nearly 10 million shares changed hands across the BSE and the National Stock Exchange, the newspaper said. At about INR 615 in mid-afternoon, Entrackr put Rentomojo's market value at roughly INR 64.6 billion.

The IPO raised INR 12.56 billion, or about $133 million at the time, according to a Reuters report carried by DealStreetAsia. Only INR 1.5 billion was fresh capital; the remaining INR 11.06 billion was an offer for sale by existing shareholders including venture firm Accel and Edelweiss Financial Services. The company said it would use the new money to repay debt and pay rent on warehouses and stores.

Demand was strong. The issue was subscribed nearly 73 times, and qualified institutional buyers bid for more than 177 times the shares set aside for them, Reuters reported. The stock listed on Sept. 17 at INR 482 on the BSE, a 19.4% premium to the issue price, and later traded about 25% above it on the first day.

What the numbers say about the model

Rentomojo's platform serves mainly urban households in large Indian cities, which pay a monthly subscription for furniture and appliances instead of buying them outright. The model ties up money in inventory and storage before the rent comes in, which is why the fresh IPO money was earmarked for debt repayment and warehouse and store rent. The flat EBITDA margin in the September quarter suggests Rentomojo has so far held costs in line with growth rather than squeezed out more profit per rupee of sales.

The growth rate has also picked up. In the fiscal year that ended in March, revenue rose 45.5% to INR 3.87 billion and profit rose 142% to INR 1.04 billion, according to the Reuters report. The first half of the current year has run faster, at about 52%. Market research firm Ken Research expects India's online furniture rental and leasing market to more than double to $9.31 billion by 2031, Reuters said.

Rentomojo is one of a long line of Indian listings in 2026. By mid-September, 165 companies had raised $8.61 billion in Indian IPOs this year, more listings than any other market, according to LSEG data cited by Reuters. Smaller issues have also drawn heavy demand, as with the debuts of BLS Polymers and SFC Environmental last month.

The next test comes with the December-quarter results, the first full quarter Rentomojo will have spent as a listed company. At its mid-afternoon price on Wednesday, the company was valued at nearly 17 times its revenue for the year ended in March.