Rentomojo IPO: 152X is one cheque, not the spread
The 152X in the headline is one individual selling Rs 6 crore. Every institution in Rentomojo's offer for sale sits between 4X and 9X, and every multiple in the table is Entrackr's own calculation.
- The 152X in the headline belongs to Nitish Mittersain, founder of Nazara, on a Rs 6 crore sale, the smallest line in the table.
- Institutional multiples run from Accel India at 8.63X on a Rs 317 crore sale down to GMO at 4.24X on Rs 95.1 crore.
- Every multiple is computed by Entrackr from the upper price band of Rs 404 a share against weighted average acquisition costs, not reported by the company.
- Holding periods are not disclosed, so no multiple here is an annual return, and none is disclosed for founder Geetansh Bamania's Rs 34.3 crore sale.
Entrackr’s headline on Rentomojo’s offer for sale reads up to 152X. The body underneath does not carry it. The 152X belongs to one individual, Nitish Mittersain, founder of Nazara, on a Rs 6 crore sale, which is the smallest line in the table. Every institutional multiple sits between 4X and 9X.
Accel India is at 8.63X on a Rs 317 crore sale. Madison India is at 7.22X on Rs 96.9 crore, ValueQuest at 5.4X on Rs 109.6 crore, Edelweiss at 5.4X on Rs 116.5 crore, Chiratae Ventures at 4.93X on Rs 194.1 crore and GMO at 4.24X on Rs 95.1 crore. The other individual line is Rajeev Chitrabhanu HUF at 26.6X on Rs 12.4 crore. The offer for sale totals Rs 1,105.6 crore.
Two qualifications matter more than the ranking. First, every multiple above is computed by Entrackr. It is not reported by the company and not projected by anyone. The outlet applied the upper price band of Rs 404 a share against the weighted average acquisition costs disclosed in the prospectus. Price the book anywhere else and every one of these numbers moves.
Second, holding periods are not disclosed, and specific entry prices are not given either, only the weighted average acquisition cost the outlet worked from. A multiple with no time attached is not a rate of return. The same multiple earned over a short hold and over a long one are different investments, and this table does not say which of the two each of these is.
Founder Geetansh Bamania is selling Rs 34.3 crore. No return multiple is disclosed for that sale.
The shape is the story rather than the winner. The biggest number in the table sits on the smallest cheque in it, Rs 6 crore, while the Rs 317 crore Accel India is selling returns 8.63X. That is the distance between an individual position and an institutional one on the same exit day, and it is why a headline multiple tells you close to nothing about what a fund made. When a returns table lands on any Indian consumer-tech listing, sort it by rupees sold before you read the multiples.
Zane’s analysis draws on original reporting by Entrackr. Read the original report.