Curation Team
NEW DELHI: WeWork India, a flexible workspace provider, has received approval from Securities and Exchange Board of India (SEBI) to launch its ₹1,000-crore initial public offering (IPO).
Bengaluru-headquartered co-working firm, which operates under the global WeWork brand, is promoted by Enam Securities in India. According to the company’s draft red herring prospectus (DRHP), the IPO offer includes a fresh issue worth ₹750 crore and an offer for sale (OFS) component of ₹250 crore by Enam.
Post-listing, the company will be traded on both BSE and NSE, with a face value of ₹10 per equity share. Proceeds from the fresh issue will be used for capital expansion, debt reduction, and technology investments, among other corporate purposes.
Operational momentum with improved financials
The company has been on a recovery path, trimming its net losses and boosting topline revenue over the past year. For FY24, it posted a revenue of ₹1,401 crore, up from ₹1,314 crore in the previous fiscal. Net losses narrowed sharply to ₹146 crore, compared to ₹286 crore in FY23.
The company’s average occupancy has now crossed 75%, translating into over 75,000 seats across major cities such as Bengaluru, Mumbai, Gurugram, and Pune. Its EBITDA, excluding ESOP costs, has turned positive for the first time, offering a strong case for profitability in the near term.
On the balance sheet front, the company has managed to reduce its total borrowings to ₹498 crore by March 2024, from ₹637 crore a year earlier.
Strategic vision and use of funds
Out of the ₹750 crore expected from the fresh issue, the company plans to allocate ₹350 crore toward setting up new centres and upgrading existing ones. Another ₹200 crore is earmarked for debt repayment and lease liabilities, while ₹150 crore will be deployed to enhance its tech stack and customer interface systems.
The company is betting big on AI-driven enterprise solutions, seamless digital bookings, and real-time occupancy analytics to differentiate its offerings. “With our hybrid model evolving, we’re not just offering workspaces; we’re building flexible ecosystems for the new-age workforce,” Karan Virwani, CEO of the company said during a recent investor interaction.
Portfolio
According to DRHP, the company had a total operational portfolio of 8.87 million sq ft of gross area as of March 31, 2024, across 50 centers in nine cities .
Out of this, 6.98 million sq. ft. constitutes leased and managed spaces—the core leasable area relevant for business operations. Within this segment:
- 5.85 million sq ft is leased space.
- 1.13 million sq ft is under a managed space model (also referred to as revenue-sharing arrangements).
The average occupancy rate across all operational centers stood at 72% as of FY24. This marks a recovery from 64% in FY23.
Offer for sale
As per the DRHP, the offer for sale (OFS) component of WeWork India’s IPO will see significant participation from its key promoters and early investors. Embassy Buildcon LLP, a part of the Embassy Group and a promoter entity, is proposing to offload up to 5.41 crore equity shares, marking a strategic partial exit from its investment in the co-working firm.
In addition, Ivanhoe Cambridge, the real estate investment arm of Canadian pension fund CDPQ, will offer up to 4.26 crore equity shares through the OFS. The third participant is Bihar Hotels, which plans to sell up to 1.35 crore shares. Collectively, the OFS will amount to a total of 11.03 crore shares, providing a partial exit route for long-standing stakeholders while enhancing the company’s public ownership base.
Challenges ahead
Despite its strong brand recall and improving metrics, WeWork India has flagged several business risks in its DRHP. Among them is its overdependence on leased assets, which account for a significant portion of operational expenses. The company also faces intense competition, not just from other co-working firms, but also from real estate developers increasingly eyeing the flex-space segment.
Moreover, a large portion of its revenue is concentrated in metros, making it vulnerable to regional economic shifts. The company also acknowledged operational challenges around regulatory approvals, taxation, and partner ecosystem transparency, which could impact scalability.
The IPO is being led by Axis Capital, ICICI Securities, and Kotak Mahindra Capital, with legal counsel provided by Shardul Amarchand Mangaldas and Latham & Watkins LLP.
