Cult.fit IPO DRHP filed: ₹950 crore fresh issue plan

Cult.fit has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), formally starting the process for a proposed initial public offering (IPO). The filing outlines a structure that combines a fresh issue by the company with an offer-for-sale (OFS) by existing shareholders. The final size of the IPO will depend on the issue price that will be announced later through the price band.

The DRHP also spells out how Cult.fit intends to use proceeds from the fresh issue, including payments linked to its existing fitness centres, debt repayment, and marketing. A separate Reuters report said the company did not immediately respond to a request for comment on the total offer size.

What the DRHP filing signals

Filing a DRHP is a key step in India’s IPO process, as it begins SEBI’s review before any public marketing of the issue. For Cult.fit, the filing puts numbers and structure on the table, including the split between new capital coming into the company and secondary share sales by investors and founders.

The document indicates that the eventual size of the public issue cannot be pinned down until the price band is declared, because the OFS value is a function of the final issue price. That makes the share count in the OFS a critical anchor point at this stage.

IPO structure: fresh issue plus OFS

As per the DRHP details provided, the proposed IPO comprises:

• A fresh issue of equity shares aggregating up to ₹950 crore.
• An offer-for-sale (OFS) of up to 17.86 crore equity shares by existing shareholders.

Cult.fit will receive proceeds only from the fresh issue portion. The OFS proceeds will accrue entirely to the selling shareholders, as stated in the filing details.

Pre-IPO placement: up to ₹190 crore

The company may also undertake a pre-IPO placement of up to ₹190 crore. The DRHP states that if the pre-IPO placement is completed, the size of the fresh issue will be reduced accordingly. This mechanism is commonly used to bring in capital ahead of the public issue, while keeping overall dilution and fundraising aligned with the company’s plan.

Who is selling in the OFS

The OFS includes share sales by several existing shareholders. Among those named:

• MacRitchie Investments, an affiliate of Temasek, will offload up to 2.47 crore shares, described as the largest portion of the OFS.
• Co-founder Mukesh Bansal will sell up to 1.6 crore equity shares through the offer.
• Other participating shareholders include Fitness First Luxembourg, IDG Ventures India, Tata Digital, Chiratae Trust, Accel entities, Kalaari Capital, and Schroders Capital.

A Reuters item also referenced selling shareholders including Temasek, Schroders Capital, and German fitness operator LifeFit Group.

Where the fresh issue proceeds will be used

Cult.fit has indicated specific uses for the fresh issue proceeds, with earmarked allocations for operational and financial commitments:

• Lease and rental payments for existing fitness centres: ₹217.5 crore
• Repayment or prepayment of certain borrowings: ₹120 crore
• Brand marketing and business promotion: ₹75 crore
• Remaining proceeds: general corporate purposes

These stated allocations provide investors a clear view of near-term cash deployment, and also highlight that a portion of the funds is aimed at supporting existing operations rather than only expansion.

Lead managers and registrar for the issue

The DRHP lists the book-running lead managers (BRLMs) as:

• Kotak Mahindra Capital
• Axis Capital
• Goldman Sachs (India)
• Jefferies India
• JM Financial

MUFG Intime India has been appointed as the registrar to the issue.

Why the final IPO size is not yet fixed

At this stage, the fresh issue has a defined upper value in rupees, but the OFS is expressed in number of shares. That means the rupee value of the OFS will only be known after the price band is announced and the final issue price is discovered.

Separately, the potential ₹190 crore pre-IPO placement can reduce the fresh issue size, as noted in the filing details. Together, these two factors mean headline “total issue size” numbers can vary across reports until the company finalises pricing and confirms whether the pre-IPO placement is executed.

Reported estimates versus DRHP specifics

Beyond the DRHP-linked figures, other reports cited estimates for the overall fundraise and valuation. One section of the provided material referenced media reports placing the IPO size in the ₹3,500 crore to ₹4,000 crore range. Another portion stated that the IPO aims to raise ₹2,500 crore and value the company at around $1 billion.

These figures are presented as estimates and reports, while the DRHP details shared here provide the concrete components currently specified: the fresh issue cap, the OFS share count, and the optional pre-IPO placement.

Key facts table from the filing details

What investors will watch next

The next milestones will include SEBI’s observations on the DRHP and the company’s decision on whether to proceed with a pre-IPO placement. After that, the price band announcement will be the key step that determines the OFS value in rupees and the overall headline IPO size.

For market participants, the structure also clarifies that the company’s balance sheet benefit will come from the fresh issue only, while the OFS is designed to provide partial exits for existing shareholders.

Conclusion

Cult.fit’s DRHP filing lays out an IPO anchored by up to ₹950 crore in fresh capital and an OFS of up to 17.86 crore shares, with a possible ₹190 crore pre-IPO placement. The company has also detailed the intended use of fresh issue funds across leases, debt repayment, marketing, and general corporate purposes. The timeline and final offer size will become clearer after SEBI’s review and the subsequent price band announcement.