Fitness services platform Cult.fit Ltd has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial public offering. According to the draft red herring prospectus filed on Monday (July 7, 2026), the proposed IPO comprises a fresh issue of equity shares worth up to ₹950 crore and an offer-for-sale of up to 17.86 crore equity shares by existing shareholders. Tata Digital will offload about half of its stake during the IPO, marking the first time it will sell shares in a new-age company that it invested in under Tata Sons chairman N. Chandrasekaran's digital commerce push. Tata Digital invested ₹360 crore in the company in August 2021 and will offload 15.9 million shares during the IPO, which represents about 46% of its total shareholding. The company plans to utilize proceeds from the fresh issue for repayment or prepayment of certain borrowings, expansion of its fitness centre network, investment in subsidiary Cultsport Pvt Ltd for setting up new exclusive brand outlets, lease-related payments for existing centres, brand marketing and general corporate purposes. The Bengaluru-based company may undertake a pre-IPO placement of equity shares aggregating up to ₹190 crore before filing the Red Herring Prospectus, which would reduce the size of the fresh issue accordingly.
MacRitchie Investments Pte Ltd, Fitness First Luxembourg SCA, IDG Ventures India Fund III LLC, Tata Digital, Chiratae Trust, Schroders Capital Private Equity Asia Mauritius IV Ltd, Twenty Nine Capital Partners Ltd Partnership and Accel India V (Mauritius) Ltd are among the selling shareholders participating in the offer-for-sale. According to Moneycontrol, MacRitchie Investments remains the largest shareholder with a 20.32% stake, while global venture capital firm Accel holds 13.45% and co-founder Mukesh Bansal retains 8.35%. Other major backers include Kalaari Capital with 7.8%, food delivery giant Eternal with 4.88% and Tata Digital with a 3.58% stake. In addition to institutional investors, Mukesh Bansal, Bruno Eduard Raschle, and actor Hrithik Rakesh Roshan are also offloading shares through the OFS. The Bengaluru-headquartered company is co-founded by Myntra founder Mukesh Bansal and backed by marquee investors including Temasek, Accel and Schroders.
According to the latest draft prospectus, Cult.fit reported revenue of ₹1,721 crore in FY26 with a loss of ₹252 crore. The company's revenue has doubled over the past two financial years while its losses have narrowed to less than a third. The company is looking to offer its shares at a valuation of around ₹15,000 crore on a fully diluted basis, as per a merchant banker involved with the IPO. Tata Digital purchased 11.9 million CCPS of Cult.Fit in 2021 at ₹304 each and will convert each preference share into 2.89 equity shares ahead of the IPO, giving Tata Digital about 34.4 million shares of Cult.fit and implying an average acquisition cost of ₹105.35 per share. The size of the offer could vary depending on investor sentiment closer to the launch.
According to the DRHP, Cult.fit operates 708 fitness centres across 77 cities with 10 lakh members, with 90%+ revenue coming from just 4 metro cities. The company's lease payments alone consume 9% of total expenses, highlighting the significant cost structure challenges in the gym business. The DRHP highlights that India's middle class is increasingly spending beyond essential expenses, especially on fitness and health, which holds a bigger opportunity to tap. It argues that India is highly underpenetrated in terms of fitness subscriptions, as less than 1% of Indians hold a fitness gym membership, compared to 25% in the US and 5.5% in China. As per Redseer's report cited in the DRHP, Cult.fit is four times larger than its closest competitor and generates 14 times more revenue. The company plans to expand through a franchise model and corporate wellness initiatives to diversify its revenue base beyond metro markets.
The Cult.fit IPO has revived memories of Talwalkars Better Value Fitness, which got listed in 2010 but later went into bankruptcy proceedings over misrepresentation of its books of account. Talwalkars became the first listed gym entity and operated 152 centres across 80+ cities serving over 2 lakh customers at its peak. However, in 2019, the company defaulted on a minor interest payment of ₹3.5 crore despite showing ₹77 crore in cash and bank balance on its balance sheet, which alarmed investors and resulted in a 70% share price plunge. A SEBI-appointed KPMG forensic audit revealed major accounting fraud with fictitious book entries, where claimed cash balance of ₹94 crore as of March 31, 2018 turned out to be merely ₹5 crore. The company was eventually sold to a bidder for ₹15 crore with NCLT ordering complete capital reduction valuing ownership at zero. Cult.fit now intends to enter asset-heavy business model with ₹276 crore of IPO proceeds earmarked for expansion, setting up Cult Elite and Cult Neo centres requiring heavy capex for further expansion.
