Synopsis : Fitness and wellness platform Cult.fit has filed its DRHP with SEBI for an IPO comprising a ₹950 crore fresh issue and a 17.8 crore-share Offer for Sale. The company plans to use the proceeds to expand fitness centres, reduce debt and strengthen its retail presence.
India's IPO market continues to remain active, with another well-known consumer brand preparing to go public.
Fitness and lifestyle platform Cult.fit has filed its Draft Red Herring Prospectus (DRHP) with SEBI for its initial public offering.
The proposed IPO will consist of a fresh issue of equity shares worth ₹950 crore along with an Offer for Sale (OFS) of 17.8 crore equity shares with a face value of Re 1 each.
While the issue price and IPO dates have not yet been announced, here are three important details investors should know.
1. IPO structure and lead managers
Cult.fit plans to raise ₹950 crore through a fresh issue, while existing shareholders will sell over 17.8 crore shares through the Offer for Sale.
The IPO is being managed by Axis Capital, Goldman Sachs (India), Jefferies India, JM Financial and Morgan Stanley India.
KFin Technologies has been appointed as the registrar.
The company has also indicated that it may undertake a pre-IPO placement of up to ₹190 crore before launching the public issue.
2. How the company plans to use the IPO proceeds
A significant portion of the fresh issue proceeds will be invested in expanding the company's fitness network.
Cult.fit plans to allocate:
- ₹276.6 crore towards setting up new Cult fitness centres.
- ₹217.5 crore for lease, rental and licensing expenses related to fitness centres.
- ₹120 crore for repayment or prepayment of outstanding borrowings.
- ₹75 crore for brand promotion, marketing and advertising activities.
- ₹23.4 crore will be invested in its subsidiary Cultsport to support the expansion of exclusive retail outlets.
The remaining funds will be used for general corporate purposes.
3. Key risks investors should monitor
The DRHP highlights several business risks that investors should carefully evaluate.
These include challenges related to customer retention, brand reputation, intellectual property disputes, fluctuations in imported products and continued losses at certain subsidiaries.
The company also depends heavily on revenue generated from its fitness centres, making occupancy and membership growth important factors.
In addition, disruptions in technology infrastructure, slower sales of fitness products and regulatory or legal compliance issues could impact future performance.
About Cult.fit
Headquartered in Bengaluru, Cult.fit operates one of India's leading fitness and wellness platforms.
The company offers gym memberships, group fitness classes, wellness services and sports products while operating a large network of fitness centres across multiple Indian cities.
Disclaimer : This article is intended solely for informational purposes and should not be considered investment advice or a recommendation to subscribe to the IPO. IPO investments involve market risks, and the company's future performance may differ from current expectations. Investors should carefully read the Red Herring Prospectus (RHP), evaluate the associated risks and consult a SEBI-registered investment advisor before making any investment decision.
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