About AWFIS SPACE SOLUTIONS Limited

AWFIS SPACE SOLUTIONS LIMITED, provide a wide spectrum of flexible workspace solutions ranging from individual flexible desk needs to customized office spaces for start-ups, small and medium enterprises (“SMEs”) as well as for large corporates and multi-national corporations. Their flexible workspace solutions cater to varied seat cohorts ranging from a single seat to multiple seats, which can be contracted by their clients for a period ranging from one hour to several years.

Company is largest flexible workspace solutions company in India as on Dec’23, based on total number of centers & is ranked 1^st among the top 5 benchmarked players in the flexible workspace segment with presence in 16 cities in India.

Company is present in the maximum number of micro-markets in India with 169 total centers across 16 total cities in India, with 105,258 total seats and total chargeable area of 5.33 million sq. ft. The company has also entered into signed letters of intent (“LOI”) with space owners for 13 additional centers, with 10,859 seats aggregating to 0.55 million sq. ft. The company has 2,295+ clients and have presence in 52 micro markets in India.

The Indian office market is expected to grow at a CAGR of 6.3% from 2023 to 2026. According to the CBRE Report, India's commercial Tier 1 office stock stands at 832 million sq. ft. as of December 31, 2023. In addition, the unorganized commercial office stock across Tier 1 cities can be estimated to be approximately 600 – 730* million sq. ft. as of December 31, 2023.

As of December 31, 2023, over 85% of the commercial office stock in India, aggregating to 708 million sq. ft., pertains to Grade A category. Grade A office stock registered a CAGR of 15%, from 58 million sq. ft. in 2005 to approximately 708 million sq. ft. as of December 31, 2023.

While Grade B stock accounted for approximately 15% of the organized commercial office stock in India as of December 31, 2023. However, a diminishing trend in Grade B stock’s share is observed over the years attributable to the evolving nature of the sector, changing occupier preference leading to a higher introduction of quality Grade A assets.

Risk associated to the issue:

• The company have a history of net losses, negative earnings per share (“EPS”) and return on net worth (“RoNW”). They need to generate and sustain increased revenues while managing expenses for profitability.
• The company have entered into long-term fixed cost leases, i.e., SL for 1.94 million sq. ft. covering 62 total centers across 11 total cities and 9 states and 33.57% of total seats as of December 31, 2023, which may result in adverse impact in liquidity, results of operations, cash flows and profitability.
• As of Dec’23, 67.82% of rental income from co-working spaces was derived from centers located in Bangalore, Mumbai, Pune and Hyderabad.
• The company faces significant competitive pressures from unorganized players.
• Operational risks are inherent as it includes rendering services at high quality standards at centers. A failure to manage such risks could have an adverse impact on business, results of operations, cash flows and financial condition.