The Cult.fit IPO Explained

**SPEAKER_1** (0:00)
Hello, folks, you're tuned in Finshots Daily. In today's episode, we break down the upcoming Cult.fit IPO.
But before we begin, here's a quick note from team Ditto. This weekend, we're hosting a free two-day insurance masterclass that helps you build real financial security by understanding health and life insurance the right way. Well, the masterclass is completely free, and you can head to the link in the description to register while you see it's last.
Okay, let's start with the story.
Back in 2016, a company called Curefit Healthcare was incorporated with an incredibly ambitious dream. The goal was not just to open a few gyms, but to build a deeply integrated health and wellness giant. They wanted to tackle everything from physical fitness and nutrition to core health care. However, over the next decade, an interesting shift occurred. One single vertical began to grow so rapidly that it completely overshadowed every other segment. That vertical was the fitness services and active lifestyle products business, what we now know as Cult.fit today. It became so dominant that in April 2026, the company retired the old Curefit corporate identity entirely and rebranded itself as Cult.fit Limited. Today, every single piece of its ecosystem including physical gyms, a mobile app, treadmills, active wear and workout accessories sits under the familiar Cult name, all branded with its distinctive Vitruvian Man logo. On the surface, this aggressive brand consolidation has been a success. Cult.fit has successfully scaled to become India's largest organized fitness platform. The numbers are hard to ignore. The company currently operates 708 fitness centers across 77 cities, serving nearly 1 million paying customers. At the same time, it has built a significant retail footprint, selling gym equipment and apparel to fitness enthusiasts across the country. But fueling this kind of nationwide expansion requires a mountain of capital, which brings us to the big news. The company is looking to raise 950 crore rupees through a fresh issue of shares to fund its next leg of growth. Simultaneously, its early backers, including the founder Mukesh Bansal, are using this moment to cash in on their bets and are selling up to 17.8 crore shares through an offer for sale. This brings us to the most critical question on every investor's mind. What exactly are public shareholders buying into?
Now, at first glance, you might look at Cult.fit and assume it's just a high tech chain of boutique gyms, but that is only half the picture. The company actually runs a dual engine model.
Roughly 70% of its revenue comes from fitness services which include gym memberships, personal training packages and corporate wellness programs. The remaining 30% comes from its product division, selling things like treadmills, active wear and recovery gear. The secret sauce that connects these two distinct worlds is the Cult.mobile app. When a user signs up for a gym membership, the app actively coaxes them into the retail ecosystem, and the strategy is working. Today, nearly one third of all active fitness members end up buying physical products directly through the platform. From a growth perspective, the company is clearly picking up speed. Their revenue has practically doubled over the last two years, skyrocketing from 927 crore rupees in FY24 to 1,721 crore rupees in FY26. Even better, after years of heavy cash burn, its adjusted EBITDA has finally turned positive. If you look at the services side of the business alone, it has actually become quite comfortably profitable at a segment level, but folks, there's a twist. Despite these operational milestones, the overall company is still deep in the red. In FY26, Cult.fit reported a net loss of 252 crore rupees. So, why is a business with a million paying subscribers still struggling to make a clean profit? Well, the answer lies in the underlending cost of running a nationwide network of gems. Every time Cult.fit opens a new location, it hits the books with heavy depreciation from expensive equipment, substantial finance costs, employee stock compensation, and expensive lease obligations. In fact, while the company's traditional borrowings are not alarmingly high, lease liabilities because of physical gems require long-term rental commitments. If certain underperforming subsidiaries continue to lose cash, Cult.fit will have to keep injecting fresh capital into them through corporate loans or equity infusions. That means less cash available for real expansion, and this raises the risk of painful future write-offs if those internal investments fail to recover. In FI26 alone, Cult.fit spent over 90 crore rupees simply on leasing its company-owned gems and another 90 crore rupees on leases for warehouses, offices and retail stores. Put together, lease payments alone accounted for nearly 9% of the company's total expenses, and that is before spending a single rupee on trainers, electricity, maintenance or marketing.
And that's exactly the dilemma Cult.fit finds itself in. The company is losing money today, but pulling back on expansion isn't really an option either. India's organized fitness market is still severely underpenetrated, competition is intensifying, and the first player to build scale could enjoy lasting advantages in brand, network and customer acquisition. So instead of slowing down to project profits, Cult.fit is choosing to double down on growth. And that's precisely where the IPO comes in. The single biggest use of the fresh capital is expansion. About 277 crore rupees will go towards setting up new Cult, Elite and Cult new fitness centers. Another 218 crore rupees has been earmarked to pay leases and license obligations on existing company operated gyms.