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Mint
a day ago
- Business
- Mint
Coworking IPO boom: Can India's flexi-office giants turn profitable?
On 17 July, Smartworks Coworking Spaces Ltd listed on the stock exchanges and the shares traded marginally above their issue price. The coworking space provider was following in the footsteps of its industry peer Awfis Space, which listed in May 2024 and has gained 60% from its issue price. Another leading player, IndiQube, is expected to list on 31 July, while the biggest coworking player in India by revenues, WeWork India, is expected to go public in August. Riding a post-covid surge in customer acceptance, the sector's business models are rapidly maturing. They are all in the throes of trying to turn profitable—and sustainably so—amid a rapid scale-up. Coworking spaces have undergone a dramatic transformation in the years following the pandemic. The top six Indian cities together boasted 32 million sq ft of flexible office space in March 2020, as per Icra Research. This is likely to have soared to 85 million sq ft by March 2025, growing by an average rate of 22% a year. Icra expects this growth to continue until March 2027, and vacancy levels to remain low, in the 15-17% band. Once seen as catering to individuals and small teams, coworking office spaces are increasingly on the agenda even for medium and large establishments. This wider acceptance is driving a change in customer profile. Until March 2020, nearly 70% of the occupancy in coworking spaces were with the information technology (IT) and IT-enabled services (ITES) sectors. In four years, this dropped to 39%, and startups as well as sectors beyond engineering and financial sectors have become clients. Benefit of size Larger customers are a win-win arrangement for both coworking companies and customers (i.e., businesses taking up the spaces). For customers, it frees them up from the more expensive proposition of owning their own space, while facilitating a flexible and hybrid model of working that many employees have come to prefer. For coworking space providers, larger clients translate to relatively less effort on the sales side and more surety on the revenue side, especially if they can negotiate longer tenures in such deals. For both Smartworks and IndiQube, about 60% of the revenue is coming from clients that have taken up more than 300 seats each. Including clients that have taken up 100-300 seats as well, the share jumps to 85-88%. Such scale in how they earmark their office spaces is a big way in which coworking companies are optimising their revenue and sales efforts. Journey to profits These companies are also exploring new cost-side strategies. There is a conventional 'straight lease" operating model, in which coworking companies typically lease bare-shell properties for extended periods (often 10 years with a 3-5 year lock-in), fit them out, and then offer them to customers. This is the principal model for both WeWork India and Smartworks. Another emerging model is the 'managed aggregation" model, which Awfis is additionally adopting. Here, the space owner bears the fit-out costs, in part or in full, in return for a fixed guarantee, plus a share in revenue or profits. This reduces the capital requirement for coworking firms. At present, these companies are making healthy margins at the operational level, but are struggling to generate net profits. In their business model, capital investments (in fit-outs) are front-loaded and depreciated over time. Being a relatively new and expanding business means this burden is large right now. Exits amid expansions The four coworking companies named earlier, which have all gone public or are about to do so, are all generating strong cash flows at an operational level. That's because coworking spaces typically charge customers upfront. Those strong cash flows, boosted by periodic fundraises, have gone a significant way in enabling them to finance their expansion and also manage debt. As a result, other than IndiQube and to some extent Smartworks, the other two are not looking to use the IPO proceeds for expansion. In fact, in all four companies, promoters and investors have sold their shares in their IPO, a transaction in which no money goes to the company. While the offer for sale (shares sold by promoters and investors) is 80-100% of the issue for Awfis and WeWork India, it is smaller in case of the other two, with a greater share of the proceeds going to the company. Capital infusion or not, converting expansions into profits will take time and will be a key marker of how the market values coworking space providers. is a database and search engine for public data.
Mint
17-07-2025
- Business
- Mint
Managed workspace firm IndiQube's IPO to open on 23 July
Bengaluru: Managed workspace solutions firm IndiQube Spaces Ltd will launch its initial public offering (IPO) on 23 July, after competitor Smartworks' successful public listing on Thursday. Bengaluru-based IndiQube will raise ₹ 700 crore, comprising a fresh issue of ₹ 650 crore and an offer for sale (OFS) of ₹ 50 crore by the promoters Rishi Das and Meghna Agarwal, as per the red herring prospectus (RHP) filed on Thursday. Existing investor WestBridge Capital will not be doing any OFS. IndiQube plans to use ₹ 462.6 crore of the IPO proceeds for setting up new centres, ₹ 93 crore towards debt repayment and the rest on general corporate purposes. As of 31 March 2025, the company manages a portfolio of 8.40 million sq ft across 115 properties in 15 cities with a total seating capacity of 186,719. In two funding rounds during 2018 and 2022, IndiQube raised a total equity of ₹ 324 crore, led by WestBridge Capital with ₹ 190 crore, followed by promoter investment of ₹ 131 crore, and the remaining from angel investor Ashish Gupta. The book running lead managers to the offer areICICI Securities Ltd andJM Financial Ltd. IndiQube reported total income of ₹ 1,103 crore in FY25 compared to ₹ 868 crore in the preceding year. It posted an Ebitda of ₹ 660 crore in FY25. Revenue from value-added services doubled from ₹ 68 crore in FY23 to ₹ 135 crore in FY25. As per property advisory JLL India, India has seen remarkable growth of operational flexible space stock, which has now reached a substantial 79.1 million sq ft across the top seven cities. The operational flex stock is expected to nearly double over the next four to five years, and reach 135 million sq ft by 2028. Indiqube and Smartworks are managed office operators, while Awfis' portfolio is a mix of co-working spaces and managed offices. The tech-dominated cities of Bengaluru, Hyderabad, Pune, and Chennai currently account for more than 72% of the operational flex footprint across the top seven cities, according to JLL. 'The year 2025 has started strongly for flex operators, backed by the demand they are attracting from a cross-section of companies. In the last year, operators have acquired space in many Grade A buildings to strengthen supply. The IPO route will help these companies access capital and grow faster,' Karan Singh Sodi, senior managing director - Mumbai MMR and Gujarat and head-alternatives, India, JLL, toldMint. Meanwhile, Smartworks listed on the exchanges on Thursday at a premium of 7.15%. The stock debuted at ₹ 436.10 on BSE, against the issue price of ₹ 407. Its ₹ 583 crore IPO that concluded earlier this week was subscribed 13.92 times overall. A year ago,Awfis Space Solutions was the first company in the flexible workspace sector to go public. Earlier this week, WeWork India also secured approval from the markets regulator Sebi to launch its IPO.
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Business Standard
17-07-2025
- Business
- Business Standard
Smartworks Coworking aims to 'scale up' business after market debut
Smartworks Coworking Spaces, the shared office space provider which made a market listing this week, aims to 'scale further' after adding 1.5 million square feet to its portfolio from January to March 2025. The Gurugram-based company has added an average of 1.3 million square feet of office space each year since 2022. 'Over the past three years, we have expanded to 10 million from 6 million square feet. In the first three months of 2025 alone, we added another 1.5 million square feet, bringing our total to over 11.5 million square feet,' Neetish Sarda, managing director of Smartworks, told 'Business Standard' in a telephonic conversation. 'Given the strong potential of the Indian market, we are confident in our ability to scale further. Despite operating on a high base, we have maintained a 35 per cent growth rate over the last couple of years, and we expect this momentum to continue,' he said without elaborating on the number. The company on Thursday listed at Rs 445.1, a near 10 per cent premium to its issue price and taking its market cap to Rs 5,067 crore. Its initial public offering (IPO) follows that by Awfis Space Solutions, which listed last year and now has a market cap of over Rs 4,662 crore. Public listings by WeWork India, Indiqube and DevX are in the works, driven by demand for co-working office spaces across markets and sectors. According to Anarock, co-working spaces were the second highest demand-generating segment for leased office spaces from January to June. Smartworks said it seeks a 'self-sustaining growth cycle', driven by cash inflows and demand for new and Grade A office spaces, alongside co-working and flex spaces. In FY25, the company reported Rs 250 crore in rental revenue. While overall revenue grew sevenfold and cash profits tripled, adjustments under Deloitte's audit process impacted the reported financials and resulted in a net loss of Rs 63 crore in FY25, the company said. Harsh Binani, executive director of Smartworks, said the company is expanding to 'high-performing cities' beyond India's top seven and scaling up its presence with larger buildings and increased capacity. The expansion will add to its portfolio of 54 offices in 14–17 cities in India, as well as in Singapore. 'In the new cities we're entering, we typically launch with one or two centres.' Smartworks has a client base of around 728 companies, including Google, Larsen & Toubro, Nothing, Groww, and Ernst & Young. The shared office space provider currently offers a total seat capacity of over 2.3 lakh across its centres. Binani noted that the company has increased its profits 3.5 times and doubled its revenue over the past two years, a momentum it intends to continue. 'We're currently growing 1.5 times faster than any other player in the market, and we expect this momentum to continue.' With the IPO, the total offer size comprises a fresh issue of equity shares aggregating up to Rs 445 crore and an offer for sale of up to 3,379,740 equity shares by certain existing shareholders. Smartworks has allocated Rs 114 crore from the proceeds for debt reduction and Rs 226 crore for fit-outs. Smartworks made its debut on the NSE and BSE, following the successful completion of its IPO. The company's shares listed at Rs 436.10 on the BSE, marking a premium of Rs 29.10. On the NSE, the stock opened slightly lower at Rs 435, reflecting a premium of Rs 28 per share.
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Business Standard
17-07-2025
- Business
- Business Standard
Smartworks eyes 35% annual growth post-IPO amid rising office demand
Gurugram-based shared office space provider and D-Street debutant Smartworks Coworking Spaces aims to maintain an annual growth rate of 35 per cent, having added 1.5 million square feet to its overall portfolio within the January–March 2025 period, versus an average of 1.3 million for each year since 2022. 'Over the past three years, we have expanded to 10 million from 6 million square feet. In the first three months of 2025 alone, we added another 1.5 million square feet, bringing our total to over 11.5 million square feet,' said Neetish Sarda, managing director, Smartworks. 'Given the strong potential of the Indian market, we are confident in our ability to scale further. Despite operating on a high base, we have maintained a 35 per cent growth rate over the last couple of years, and we expect this momentum to continue.' The company's oversubscribed IPO, which listed at Rs 445.1 — a near 10 per cent premium to its issue price — taking its market cap to Rs 5,067 crore, follows Awfis Space Solutions, which listed last year and now has a market cap of over Rs 4,662 crore. A slew of public listings by co-working space providers including WeWork India, Indiqube and DevX are in the works, largely driven by the increasing demand for co-working office spaces across markets and sectors. According to Anarock, co-working spaces were the second-highest demand-generating segment for leasing office spaces in the January–June period, during which net office space absorption rose to 26.8 million sq ft, up 40 per cent from the same period a year earlier. Smartworks is aiming for a self-sustaining growth cycle, driven by strong cash inflows on the back of rising demand for new and Grade A office spaces, alongside co-working and flex spaces. In FY25, the company reported Rs 250 crore in rental revenue. While overall revenue grew sevenfold and cash profits tripled, adjustments under Deloitte's audit process impacted the reported financials, resulting in a net loss of Rs 63 crore for the fiscal year, the company said. Harsh Binani, executive director, said the company is expanding into high-performing cities beyond the top seven and scaling up its presence with larger buildings and increased capacity, which will add to its current portfolio of 54 offices across 14–17 cities in India, as well as in Singapore. 'In the new cities we're entering, we typically launch with one or two centres.' Smartworks has a client base of around 728 companies, including prominent names such as Google, Larsen & Toubro, Nothing, Groww and Ernst & Young. The shared office space provider currently offers a total seat capacity of over 2.3 lakh across its centres. Binani noted that the company has increased its profits 3.5 times and doubled its revenue over the past two years — a momentum it intends to continue. 'We're currently growing 1.5 times faster than any other player in the market, and we expect this momentum to continue.' With the IPO, the total offer size comprises a fresh issue of equity shares aggregating up to Rs 445 crore and an offer for sale of up to 3,379,740 equity shares by certain existing shareholders. Smartworks has allocated Rs 114 crore from the proceeds for debt reduction and Rs 226 crore for fit-outs. On Thursday, co-working space provider Smartworks made its stock market debut on the NSE and BSE, following the successful completion of its initial public offering (IPO). The company's shares listed at Rs 436.10 on the BSE, marking a premium of Rs 29.10. On the NSE, the stock opened slightly lower at Rs 435, reflecting a premium of Rs 28 per share.
Mint
17-07-2025
- Business
- Mint
Healthy Debut! Smartworks Coworking Spaces shares list at ₹435 on NSE, up 6.88% from IPO price
Smartworks Coworking Spaces IPO listing: Shares of Smartworks Coworking Spaces made a decent debut on the bourses on Thursday, July 17, listing at ₹ 435 on NSE, a premium of 6.88 percent over their issue price of ₹ 407. Meanwhile, on BSE, the stock listed at ₹ 436.10, up 7.15 percent. Smartworks Coworking Spaces' initial public offering (IPO), with a total issue size of ₹ 582.56 crore, was open for bidding from July 10 to July 14. The offering received a healthy response from investors, closing with a subscription of 13.92 times. The IPO attracted bids for 14 crore shares compared to the 1 crore shares on offer. The retail investor category was subscribed 3.69 times while the non-institutional investor (NII) segment witnessed 23.68 times subscription. Meanwhile, the qualified institutional buyer (QIB) portion was bid the most, 24.92 times. Moreover, the employee quota was booked 2.51 times in the three days of bidding. The IPO was a combination of a fresh issue of 1.09 crore shares aggregating to ₹ 445 crore and an offer for sale of 0.34 crore shares aggregating to ₹ 137.56 crore. Its promoters include Neetish Sarda, Harsh Binani, Saumya Binani, NS Niketan LLP, SNS Infrareality LLP, and Aryadeep Realstates Private Limited. The IPO had a lot size of 36 shares, with the minimum investment amount for retail investors fixed at ₹ 13,932. Additionally, the issue featured a reservation of up to 1,01,351 shares specifically for employees, who were offered a discount of ₹ 37 per share on the final issue price. According to the company's draft red herring prospectus, the net proceeds will be primarily directed towards repaying or prepaying certain outstanding borrowings, either fully or partially. Additionally, a portion of the funds will be allocated for capital expenditure related to fit-outs in new centres and for securing deposits at these new locations. The remainder of the proceeds will be used for general corporate purposes. Smartworks Coworking Spaces garnered ₹ 173.64 crore from anchor investors on Wednesday, July 9, 2025, ahead of its initial public offering. JM Financial Limited acted as the book-running lead manager for the IPO, while MUFG Intime India Private Limited (Link Intime) served as the registrar to the issue. Smartworks Coworking Spaces Limited, founded in 2015, focuses on delivering customised managed office solutions tailored for modern enterprises. The company offers fully serviced, tech-enabled workspaces that combine functional design with essential amenities to support productivity and employee comfort. Smartworks primarily serves mid-to-large-sized organisations, including Indian corporates, global MNCs, and emerging startups. Its campuses are built with employee well-being in mind, featuring amenities like cafeterias, gyms, crèches, and medical facilities — all seamlessly integrated with smart technologies and contemporary interiors. As of March 31, 2025, Smartworks had a client base of 738 and managed 152,619 seats. Currently, it serves 728 clients with a total seat capacity of 169,541, out of which 12,044 seats remain unoccupied.
