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Policy · Commerce & Consumer Brands

RentoMojo cofounder Ajay Nain claims he was coerced into selling his stake at a fraction of its value

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RentoMojo logo
Date
Company
RentoMojo
What it does
furniture and appliance rental platform
Kind
Policy
Sector
Commerce & Consumer Brands

What they do

RentoMojo is a furniture and appliance rental platform operating in major Indian cities like Bangalore, Mumbai, Delhi, Chennai, Pune, Hyderabad, Gurgaon,…

What happened

Ajay Nain, a former COO and minority shareholder, alleges he was forced to sell his 9.41% stake in 2023 at ₹6,748 per share for ₹1.5 Cr, claiming it was…

Why it matters

The dispute has raised questions about the company's financial health and transparency, as later rounds saw shares traded at much higher prices, including a…

The details

  • Ajay Nain has filed a petition with the NCLT, alleging he was coerced into selling his 9.41% stake in RentoMojo at ₹6,748 per share for ₹1.5 Cr in August 2023.
  • Nain claims the sale was framed as a 'golden chance' to exit before the shares became worthless, despite later rounds showing significantly higher valuations.
  • RentoMojo's FY23 financials show ₹123 Cr revenue, ₹6.2 Cr profit, and a bank balance of ₹40 Cr, contradicting the financial distress narrative Nain was told.
  • Secondary transactions in late 2023 and early 2024 saw shares traded at ₹22,160 to ₹90,000 per share, far above Nain's selling price.
  • RentoMojo raised over ₹200 Cr in its Series D and D1 funding rounds in February 2024, with shares issued at ₹1.04 Lakh to ₹1.10 Lakh per share.

The bigger picture

  • The dispute has raised concerns about the transparency and fairness of RentoMojo's financial disclosures and internal governance.
  • Nain's allegations could delay or impact RentoMojo's proposed IPO, which includes a fresh issue of shares worth up to ₹150 Cr and OFS of up to 2.84 Cr shares.
  • The case highlights the risks of secondary share sales and the potential for valuation discrepancies in startup ecosystems.

About the business

  • RentoMojo is an online furniture and appliance rental platform operating in major Indian cities like Bangalore, Mumbai, Delhi, Chennai, Pune, Hyderabad, Gurgaon, and Noida.
  • The company offers designer furniture, the newest gadgets, and bestselling appliances on rent at a fraction of their retail value.
  • RentoMojo has over 100+ offline stores across various cities in India and provides complementary benefits like yearly product swaps, free maintenance, and free packing and moving services.
  • Customers pay a small monthly fee, which decreases the longer they rent from the company.
  • The platform delivers products quickly in major Indian cities and allows customers to return items at the time of delivery without deductions from their deposit.

The deal

Type
secondary sale

Founders

  • Ajay Nain, ex-COO and minority shareholder
  • Geetansh Bamania, CEO and founder

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