Cult.Fit Limited IPO

01At a glance

What the company does — runs fitness centres offering trainer-led group classes and full-service gyms, sells at-home online workouts, and designs and sells fitness equipment, recovery products and activewear, all through the Cult.fit app, website and stores (AP p.4).

Who pays it — 987,020 paid members at 31 March 2026, and buyers of its products online, through 29 exclusive branded outlets in four cities and through other retail (AP p.4).

Why it is raising money — ₹2,766.00 million for new Cult centres, ₹2,175.00 million for rent on existing identified centres, ₹1,200.00 million to repay borrowings, ₹750.00 million for brand marketing and ₹234.00 million for new outlets through its products subsidiary (AP p.6).

How fast it has grown — revenue from ₹9,266.62 million in FY24 to ₹17,206.06 million in FY26, while the loss narrowed from ₹8,872.01 million to ₹2,475.26 million (AP p.8).

The one thing to understand — the gyms now make money and the products business still loses it: the services segment earned 17.54% of its revenue in FY26 and the products segment lost 10.97% of its revenue (AP p.10).

02The business, in plain words

Cult.fit sells access to exercise. A member pays a subscription, usually monthly or longer, and can go to any of its centres for group classes — yoga, boxing, strength, dance — or use its gyms, or work out at home with its online classes. The company runs the centres, mostly on leased premises, and employs or contracts the trainers.

A person wants to get fit → buys a Cult.fit membership on the app → attends classes or the gym at a Cult centre, or trains at home online → pays a subscription for the period.

Beside the services business sits a products business: fitness equipment, massage chairs and other recovery products, accessories, and activewear and footwear the company designs itself. It is sold online, through 29 exclusive branded outlets in four cities and through other retail, and much of the equipment is imported, including from China (AP p.4, AP p.11).

The company reports two segments, services and products, after realigning its internal reporting in FY26 (AP p.4). It is professionally managed and, the document states, has no identifiable promoter (AP p.6).

Earnings equation: Services revenue = paid members × average subscription, against the cost of centres (rent, trainers, upkeep); Products revenue = units sold × price. Members rose from 691,000 to 987,000 over two years and units sold from 19,040 to 42,390 (AP p.10).

03Where the money comes from

Source: AP p.9; shares computed here.

Source: AP p.10.

There is no customer concentration in a membership business. Geographic concentration is named instead: a significant portion of revenue comes from fitness centres in certain states, which the document lists as a risk without giving the states in the summary (AP p.11).

04The growth record

Source: AP p.8, AP p.9, AP p.10.

Revenue compounded at 36.3% a year over the two years. Adjusted EBITDA turned positive in FY26, a swing of ₹2,849.70 million from FY24, and operating cash flow turned positive in FY25 (AP p.8, AP p.10). Loss per share was ₹11.92, ₹6.40 and ₹3.27 (AP p.8).

Read from the filing: the reported loss is still ₹2,475.26 million while adjusted EBITDA is positive, and the gap is what adjusted EBITDA leaves out — depreciation, finance costs, share-based pay, fair-value losses and exceptional items, which the document says include impairment of goodwill, intangibles and investments, the impact of the new labour code and the loss of input tax credit (AP p.9). Net worth has fallen every year as losses accumulate, from ₹12,768.72 million to ₹6,698.68 million (AP p.8).

05What the growth is made of

Revenue rose ₹7,939.44 million between FY24 and FY26. Services account for ₹5,279.46 million of it and products for ₹2,659.98 million (AP p.9).

Services. Paid members rose 42.8%, from about 691,000 to about 987,000, while services revenue rose 78.8% (AP p.10, AP p.9). This is a judgement from those two figures: revenue per member rose by roughly a quarter, so both more members and more revenue per member contributed. Centres rose from 588 to 708 over the same years (AP p.10).

Products. Units sold rose 122.6%, from 19,040 to 42,390, while products revenue rose 103.6% (AP p.10, AP p.9) — so revenue per unit fell slightly, and the growth is volume.

The document does not split services revenue between gyms, group classes and online, or give average subscription prices, so the per-member reading is inferred, not disclosed.

06Earnings quality

The line that needs explaining is the exceptional items. The impairments of goodwill and investments sit outside adjusted EBITDA but inside the reported loss, and the document names goodwill as a continuing impairment risk (AP p.9, AP p.11). The abridged summary does not give their amounts by year.

The second is the auditor's remarks on back-up of books of account and the audit trail. They required no adjustment to the numbers, but the document itself raises them as a risk factor (AP p.13).

07The balance sheet

Borrowings were ₹2,607.58 million at 31 March 2026, against net worth of ₹6,698.68 million (AP p.8). Of the stated objects, ₹1,200.00 million repays borrowings — 46.0% of the year-end figure (AP p.6).

Net worth has halved in two years, from ₹12,768.72 million, because losses have exceeded fresh capital (AP p.8). The fresh issue would restore it: this is a judgement, not a disclosure, that ₹9,500.00 million of new equity is more than the whole of the March 2026 net worth.

The abridged summary does not give lease liabilities, which for a business running 708 centres on leased premises are likely to be the largest liability on the balance sheet, nor contingent liabilities.

08What the money is for

The offer is a fresh issue of up to ₹9,500.00 million and an offer for sale of up to 17,86,09,200 shares of ₹1 face value (AP p.1).

Source: AP p.6. The five named objects total ₹7,125.00 million, 75% of the fresh issue; general corporate purposes are capped at 25%. A pre-IPO placement of up to ₹1,900.00 million may reduce the fresh issue (AP p.7).

Read from the filing: rent on existing centres and marketing, ₹2,925.00 million together, are operating costs being pre-funded from the issue — the same pattern as other consumer platforms filing this year.

Into the business up to ₹9,500.00 million, the fresh issue. To selling shareholders up to 17,86,09,200 shares, not yet priced.

The issue is made under Regulation 6(2), because the company does not meet the profitability and net-tangible-asset tests (AP p.1).

09Who is selling

Source: AP p.1, AP p.2, AP p.7, AP p.8, costs certified by Manian & Rao on 6 July 2026. The percentage offered is computed here only for sellers who appear in the top-ten shareholder list. These are the ten largest sellers; they offer 13,88,12,554 shares, and further selling shareholders offer the remaining 3,97,96,646.

Most sellers are investors. The co-founder and executive chairman, Mukesh Bansal, is offering a fifth of his holding. Tata Digital, which paid the highest cost per share of those listed, is offering close to half of its stake (AP p.7).

10Promoters

The company has no identifiable promoter under the SEBI regulations or the Companies Act; it describes itself as professionally managed (AP p.6).

Mukesh Bansal, co-founder, is managing director and executive chairman and the largest individual shareholder at 8.35%. Naresh Krishnaswamy is whole-time director and chief executive. Subrata Mitra is a nominee director of Accel India IV (Mauritius); the independent directors are Arun Madhavan Kumar, Indu Bhushan, Kalpana Jaisingh Morparia and Pragya Misra. Bishnu Prakash Hazari is chief financial officer (AP p.12, AP p.13).

Litigation involving directors. Two tax proceedings on the same subject matter and four regulatory proceedings against directors, aggregating ₹488.42 million (AP p.13) — the largest amount in the litigation table.

11Who already owns it

Source: AP p.7, AP p.8. The two Kalaari funds are summed here.

Eternal, the listed company behind Zomato and Blinkit, holds 4.88% and is not selling. The ten largest holders own 64.53%; no one holds a controlling stake.

12What changed just before the IPO

• Adjusted EBITDA turned positive, from a margin of (15.13)% in FY24 to 8.41% in FY26 (AP p.10).
• Operating cash flow turned positive in FY25 and rose to ₹941.19 million in FY26 (AP p.8).
• Segments were realigned in FY26 into services and products (AP p.4).
• The services segment reached a 17.54% margin while products still lost 10.97% of revenue (AP p.10).
• Net worth fell to ₹6,698.68 million, about half of two years earlier (AP p.8).
• Exceptional charges — impairments, the labour-code impact and loss of input tax credit — were taken below adjusted EBITDA (AP p.9).
• Revenue growth accelerated, from 31.17% in FY25 to 41.55% in FY26 (AP p.9).

13Capacity and expansion

Source: AP p.10; the third row is computed here. The business section counts 486, 583 and 594 centres integrated with the app at the same dates (AP p.4).

Centre additions slowed to 18 in FY26 while members grew 18.5%, so each centre served more people. The issue funds the next build-out — ₹2,766.00 million for new Cult centres — and pre-funds rent on existing ones (AP p.6). The summary does not state how many new centres the capital buys.

14Market size and industry structure

As claimed. The industry figures come from a Redseer report. It puts India's fitness and active-lifestyle services market at about ₹256 billion in CY2025, projected to grow 14–16% a year to ₹487–531 billion by CY2030, and the fitness and active-lifestyle products market at about ₹1,157.6 billion in CY2025, projected to reach ₹2,175–2,349 billion by CY2030. It describes both markets as early-stage against major global markets (AP p.6).

The part that is addressable. Organised gym and group-fitness services in the cities where Cult.fit operates, and branded fitness equipment and activewear.

What the company is today. Services revenue of ₹11,978.32 million in FY26 against a ₹256 billion services market is about 4.7%, and products revenue of ₹5,227.74 million against ₹1,157.6 billion is about 0.5% — indicative arithmetic across a fiscal and calendar year.

Industry figures above come from the Redseer report cited in the offer document and are labelled as such.

15Competitive position

The document names no competitors in the summary and no comparable listed company anywhere: it states that no listed company in India or globally engages in a similar business (DRHP p.198, DRHP p.201).

What it gives as the basis of its position is an integrated platform — centres, home workouts and products in one app — and its brands (AP p.4, AP p.11). Its risk factors name the competitive pressure indirectly: acquiring and retaining consumers is critical, brands are critical, and negative publicity could hurt (AP p.10).

The segment numbers are the most useful competitive fact in the document: a membership business with a 17.54% segment margin in FY26, beside a products business still losing money (AP p.10).

16Peers the company named

The company names none. The DRHP states that there are no listed peer companies in India or globally that engage in a business similar to its own, so no industry comparison or industry price-to-earnings ratio is provided (DRHP p.198, DRHP p.201).

Read from the filing: listed gym chains exist abroad and listed activewear companies exist in India, but none combines both, which supports the statement. It also means that when a price band arrives, there will be no issuer-chosen reference multiple.

17Risks, in plain words

Consumers. Winning and keeping members is critical; a decline in engagement hits revenue directly (AP p.10). Membership businesses lose members every month and must replace them.

Brand. Negative publicity about the brands could hurt the business (AP p.10).

Intellectual property. The business uses third-party IP and must protect its own brand and content (AP p.10, AP p.11).

Goodwill. Significant goodwill and intangibles may be impaired, as some already have been (AP p.11, AP p.9).

Imports. Some fitness products come from suppliers outside India, including China, bringing geopolitical and currency exposure, and a limited number of suppliers supply them (AP p.11).

Losses and cash. Negative operating cash flow in the past, and losses at the company and certain subsidiaries for three years, which may need continued support (AP p.11).

Geography. A significant portion of revenue comes from centres in certain states (AP p.11).

Issue-specific. Made under Regulation 6(2), for companies that do not meet the profitability tests (AP p.1).

18Litigation and regulatory matters

Source: AP p.13, to the extent quantifiable.

The company's own exposure is small. The larger figure, ₹488.42 million, involves directors, and the abridged summary does not describe the matters.

19Related-party transactions

Not read for this study. The abridged summary carries no related-party table, and the related-party note in the restated financial information was not reached. This is a gap in this version of the study, to be filled at the red herring prospectus stage.

20What the offer document does not say

In the parts read for this study:

• The amount of each exceptional charge — impairments, labour code, input tax credit — by year (AP p.9).
• Lease liabilities, for a business on leased premises (AP p.8).
• Average subscription price or member churn.
• How many new centres the ₹2,766.00 million buys, or where (AP p.6).
• Which states the revenue is concentrated in (AP p.11).
• What the ₹488.42 million of matters involving directors concern (AP p.13).
• The price band, lot size or offer dates, which is normal at DRHP stage.

21Five questions for management

1. What were the goodwill and investment impairments, by year, and which acquisitions do they relate to?
2. What is monthly member churn, and how many months does a new member stay on average?
3. The products segment lost 10.97% of its revenue in FY26. When does it stop needing the services business to fund it?
4. Why fund ₹2,175.00 million of rent on existing centres from the issue rather than from operating cash flow, now that it is positive?
5. What are the regulatory proceedings against directors aggregating ₹488.42 million?

1Sources and cited facts

This study was read from 1 document the company filed. The 53 figures it cites are listed under the document each came from, with the page and the sentence as printed.