Rentomojo Limited petition seeks to void sale, halt IPO

Rentomojo faces a pending company petition by former director Ajay Nain that seeks to void his August 2023 share sale, restore his former holding and stop an initial public offering (IPO). A related first information report, or FIR, alleges an unlawful loss of about Rs 37.25 crore, although the Karnataka High Court stayed investigation against Rentomojo, its promoter and chief financial officer on July 17, 2026.

What does the Rentomojo petition seek over the 2023 share sale?

The Rentomojo petition seeks to undo the sale of 2,223 equity shares to RM Employee Benefit Trust and restrain steps toward the IPO. Nain filed the company petition before the National Company Law Tribunal, Bengaluru Bench, on March 25, 2026, under Sections 241 to 244 and 246 read with Section 213 of the Companies Act, 2013. He had previously been a director and had sold all his equity shares under a share purchase agreement dated August 22, 2023.

Nain alleges non-compliance with mandatory laws in connection with the sale of 2,223 shares, which Rentomojo states allegedly represented 9.41% of the company at the time. His requested relief includes removal of the promoter from the board and managerial roles, a declaration that the sale was void ab initio, meaning void from the outset, and restoration of his earlier shareholding. The petition also requests orders under Sections 241 and 242 of the Companies Act, provisions covering alleged oppression and mismanagement.

The interim relief requested would affect the offer process because it asks the tribunal to prevent Rentomojo from filing a draft red herring prospectus, or DRHP, and other offer documents with the Securities and Exchange Board of India, or SEBI, and stock exchanges. It also seeks to stop RM Employee Benefit Trust from transferring Rentomojo shares or creating third-party rights over them. A further requested restraint would apply to share transfers by the promoter and other shareholders that could allegedly prejudice Nain’s rights.

Why is the waiver application important to the Rentomojo petition?

The waiver application matters because Rentomojo says Nain held no shares after the August 22, 2023 agreement. Nain has sought a waiver of the threshold requirement under Sections 241 and 244 of the Companies Act to maintain the petition. The disclosed record does not state that the tribunal has decided that request.

Rentomojo and its promoter filed a response to the waiver application on May 1, 2026. They contend that it is not maintainable because Nain admitted that he did not hold any Rentomojo shares after the share purchase agreement. They also say the petition was filed after a delay of close to three years and omitted material facts and documents which, according to Rentomojo, show that Nain voluntarily sold all his shareholding.

The parties therefore dispute both Nain’s standing to bring the case and the circumstances of the sale. Nain seeks restoration of the 2,223 shares and a finding that the transaction was void, while Rentomojo maintains that the sale was voluntary and complete. The petition remained pending as of the red herring prospectus, leaving both the waiver question and the merits of the sale challenge unresolved.

What does the FIR allege and what did the Karnataka High Court order?

The FIR makes broader allegations than the Rentomojo petition, including an alleged loss of about Rs 37.25 crore. Nain’s complaint dated July 2, 2026 was registered as an FIR on the same date by the Inspector, Special Enquiry Wing, Central Crime Branch, Bhagalpur. It named Rentomojo’s promoter, managing director and chief executive officer, its chief financial officer, Gaurav Bamania, Beacon Trusteeship Limited as trustee of RM Employee Benefit Trust, and certain others.

The FIR invokes Sections 418, 420 and 120B read with Section 34 of the Indian Penal Code, 1860. It alleges that Nain was pressured and coerced into transferring 2,616 Rentomojo equity shares through gift deeds to certain individuals without financial consideration. Separately, it alleges that material financial information was concealed to induce the sale of 2,223 shares to RM Employee Benefit Trust under the August 2023 agreement.

Rentomojo, its promoter and its chief financial officer filed a writ petition on July 7, 2026 under Articles 226 and 227 of the Constitution and Section 28 of the Bharatiya Nagarik Suraksha Sanhita, 2023. They argued, among other grounds, that a civil dispute had been converted into a criminal case and that the allegations were already pending before the NCLT. The Karnataka High Court’s July 17, 2026 interim order stayed all investigation in the FIR against those three parties, while the matter remained pending.

How does Rentomojo classify this dispute as material?

Rentomojo disclosed the company petition as material litigation even though the monetary outcome is not specified. Its board adopted a materiality policy on August 21, 2026 under which a pending claim exceeding Rs 2.83 crore is material. The Rs 2.83 crore figure equals 5% of the average absolute value of profit or loss after tax for the preceding three financial years.

The Rs 2.83 crore threshold was lower than two alternative measures cited under the SEBI Issue of Capital and Disclosure Requirements Regulations: 2% of the latest fiscal-year turnover, or Rs 7.74 crore, and 2% of net worth, or Rs 5.92 crore. The policy also covers litigation whose result could materially affect Rentomojo’s business, operations, financial results, prospects or reputation, even where the amount is not quantifiable.

The alleged Rs 37.25 crore loss in the FIR is more than 13 times the Rs 2.83 crore policy threshold, but it remains an allegation in a complaint rather than an established liability. Rentomojo reported no criminal proceedings against the company itself. It disclosed the July 2026 FIR under litigation involving its promoter, directors, key managerial personnel and senior management, and reported no regulatory or statutory actions against the promoter or SEBI and stock-exchange disciplinary action against the promoter in the preceding five financial years.

Conclusion

The disclosed position is that the August 2023 transaction faces two separate legal tracks: an NCLT petition seeking restoration of 2,223 shares and a halt to the IPO process, and an FIR alleging coerced transfers of 2,616 shares, concealed financial information and an alleged Rs 37.25 crore loss. Rentomojo disputes the petition’s maintainability and says Nain voluntarily sold his full holding, while the FIR investigation is stayed only for Rentomojo, its promoter and its chief financial officer.

The next developments are the NCLT’s decision on the waiver application and the merits of the March 25, 2026 petition, alongside any later Karnataka High Court order on the July 17, 2026 stay. Rentomojo also filed a perjury application before the tribunal on July 20, 2026, alleging that Nain made false statements on oath and suppressed material facts and documents; that application was pending in the disclosed record.