Awfis Space Solutions is launching an IPO, with a book-built issue worth Rs 598.93 crores. This comprises a fresh issue of 0.33 crore shares, totaling Rs 128.00 crores, and an offer for sale of 1.23 crore shares, totaling Rs 470.93 crores. The IPO subscription period runs from May 22, 2024, to May 27, 2024. The allotment is expected to be finalized on Tuesday, May 28, 2024, and the shares will be listed on the BSE and NSE, with a tentative listing date of Thursday, May 30, 2024.

The price band for the shares is set at ₹364 to ₹383 per share. Retail investors must apply for a minimum of 39 shares, requiring an investment of ₹14,937. For sNII, the minimum investment is 14 lots (546 shares), amounting to ₹209,118, and for bNII, it is 67 lots (2,613 shares), amounting to ₹1,000,779.

ICICI Securities Limited, Axis Capital Limited, IIFL Securities Ltd, and Emkay Global Financial Services Ltd are the book-running lead managers for the IPO, with Bigshare Services Pvt Ltd acting as the registrar.

Objectives of the IPO
The Offer comprises of a Fresh Issue of 3,342,037 Equity Shares, aggregating to ₹ 1,28.00 Cr. & an Offer for Sale of 12,295,699 Equity Shares aggregating to ₹470.93 Cr.

Company proposes to utilize the Net Proceeds towards

1. Funding capital expenditure towards establishment of new centers.
2. Funding working capital requirements.
3. General corporate purposes.

The number of operational centers has consistently grown from 58 centers at the end of FY21 to 84 in FY22 to 119 centers in FY23 and 169 centers (138 Operational centers & 31 underfit Centers) as at December 31, 2023. Now the company intend to leverage experience and expand operations by opening new centers in India. By establishing 45 new centers under the ‘Awfis’ format in Fiscal 2025, out of which (33 centers will be funded from internal accruals while balance 12 centers shall be funded from the Net Proceeds).

The new centers to be funded from the Net Proceeds shall be established in Mumbai, Bengaluru, National Capital Region of Delhi, Hyderabad, Pune, Chennai, Kolkata, Ahmedabad, Bhubaneswar, Chandigarh, Indore, Kochi, Nagpur and Jaipur.

Grey Market Premium(GMP) of AWFIS IPO
The Grey Market Premium is expected in the range of Rs. 70 to Rs. 135 based on the grwoth and performance of the company. No real trading is done on the basis of Grey Market Premium that's why no real discovery of price can be done before the listing of shares on the stock exchange. The Grey Market Premium totally depends upon the Demand and Supply of the shares of the company in unorganised manner which is not recommended. The Grey Market Premium is mentioned for educational and informational purpose only.
 

Read more

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.