Smartworks Coworking Spaces Launches IPO: Is Subscription Worth It?
The initial public offering (IPO) of Smartworks Coworking Spaces Ltd commenced on Thursday, marking a significant entry into the Indian market. The company aims to raise between Rs 576 crore and Rs 583 crore through this offering, which includes a fresh issue of Rs 445 crore and an offer for sale of 33.79 lakh equity shares. With a price band set at Rs 387 to Rs 407 per share, the IPO is expected to attract considerable interest from investors, particularly given the company’s strong growth trajectory and established presence in the managed office space sector.
IPO Details and Subscription Trends
Smartworks Coworking Spaces Ltd has opened its IPO for subscription, with the bidding period running until July 14. The shares are set to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on July 17. The company has set a price band of Rs 387 to Rs 407 per share, offering a discount of Rs 37 for employees. Investors can bid in lots of 36 shares, with the grey market premium currently hovering around 8% above the issue price. By 1 PM on the first day of bidding, the IPO was subscribed 23%, indicating strong interest from both retail and non-institutional investors. Non-institutional investors led the demand, subscribing to 37% of their allotted quota, while retail investors accounted for 30%.
Company Profile and Business Model
Founded in 2015, Smartworks is recognized as India’s largest managed office space provider by leased area, operating over 8.99 million square feet across 50 centers in 15 cities, along with two centers in Singapore. The company caters to a diverse clientele, including mid-to-large-sized enterprises in sectors such as IT, BFSI, and startups. Smartworks primarily operates on a business model based on straight leases, with an increasing focus on variable rental contracts. This adaptability in its leasing approach positions the company well within the evolving commercial property landscape.
Use of IPO Proceeds and Financial Performance
The proceeds from the IPO are earmarked for various strategic initiatives. Approximately Rs 225.8 crore will be allocated for establishing new centers and covering security deposits, while Rs 114 crore is designated for debt repayment. The remaining funds will be utilized for general corporate expenses. Smartworks has demonstrated robust growth, with operating revenue surging from Rs 711.39 crore in FY23 to an anticipated Rs 1,374.05 crore in FY25. Despite this growth, the company reported a net loss of Rs 63.17 crore in FY25, although it has shown improvements in its margins. As of March 2025, Smartworks maintained an occupancy rate of 83.1% across its operational facilities, serving 738 enterprise clients and providing seating for over 200,000 positions.
Market Outlook and Management Team
Given its expanding footprint and focus on cost-effective leasing strategies, Smartworks’ IPO is poised to attract significant attention from investors interested in the dynamic commercial property and flexible workspace sectors in India. The company’s revenue streams are bolstered by additional offerings such as wellness facilities, retail outlets, and customized design-build solutions. The IPO is being managed by a team of leading financial institutions, including JM Financial, BOB Capital, IIFL Capital, and Kotak Mahindra Capital, who will oversee the offering and ensure its successful execution.
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