Nukleus Office Solutions Limited, a Delhi NCR-based co-working and managed office space provider, made a disappointing stock market debut on the BSE SME platform. The company's shares were listed at ₹187.20 per share, marking a 20% discount to the issue price of ₹234 per share.

The Initial Public Offering (IPO) of Nukleus Office Solutions was a fixed-price issue worth ₹31.70 crore, comprising an entirely fresh issue of 13.55 lakh shares. The IPO opened for subscription on February 24, 2025, and closed on February 27, 2025. Despite being subscribed 1.29 times, the stock's poor listing indicates weak investor sentiment towards the company’s valuation and market potential.

Company Overview & Business Model

Nukleus Office Solutions specializes in co-working spaces and managed office solutions across the Delhi NCR region. The company offers:

• Dedicated desks and private cabins
• Meeting rooms and startup zones
• Virtual offices for professionals
• Enterprise workspaces for large teams (50-500 seats)

As of December 31, 2024, the company operates 7 flexible workspace centers and manages 4 additional managed offices, totaling 2,796 seats.

Nukleus caters to a wide range of clients, including startups, SMEs, large enterprises, and professionals, making it a key player in India’s growing flexible workspace market.

Financial Performance & IPO Details

Nukleus Office Solutions has shown consistent revenue growth over the years. Key financial highlights include:

• Revenue from Operations: ₹2,135.66 lakh (Dec 31, 2024), ₹1,716.41 lakh (FY24), ₹1,089.76 lakh (FY23), ₹342.42 lakh (FY22)
• EBITDA: ₹529.99 lakh (Dec 31, 2024), ₹327.53 lakh (FY24), ₹140.23 lakh (FY23), ₹19.00 lakh (FY22)
• Profit After Tax (PAT): ₹151.13 lakh (Dec 31, 2024), ₹119.72 lakh (FY24), ₹67.27 lakh (FY23), ₹10.64 lakh (FY22)

The IPO had a market capitalization of ₹94.35 crore at the issue price of ₹234 per share. The lot size was 600 shares, requiring a minimum investment of ₹1,40,400 for retail investors and ₹2,80,800 for High-Net-Worth Individuals (HNIs).

Weak Listing & Market Sentiment

Despite its growing financial performance, the Nukleus IPO failed to generate strong demand in the grey market. The Grey Market Premium (GMP) remained at ₹0, signaling a lack of speculative interest before listing.

On its final subscription day (February 27, 2025), the IPO was subscribed 1.00 times, reflecting lukewarm investor response. The stock's 20% discount listing further highlights concerns over:

• Valuation concerns with a high post-issue P/E ratio of 78.81x
• Limited demand for SME IPOs in current market conditions
• Low grey market activity, indicating muted investor confidence

Utilization of IPO Proceeds

The company has planned to allocate the IPO proceeds towards:

1. ₹2,296.24 lakh for capital expenditure and security deposits for new workspace centers
2. ₹34.22 lakh for technology platform upgrades, including mobile app development
3. ₹49.56 lakh for advertising and brand visibility
4. ₹588.02 lakh for general corporate purposes

Expert Review & Investment Recommendation

While Nukleus Office Solutions operates in a growing industry, concerns over valuation, financial sustainability, and weak listing performance make it a risky investment at current levels.

• Pre-issue EPS: ₹19.71 | Post-issue EPS: ₹2.97
• Pre-issue P/E Ratio: 11.87x | Post-issue P/E Ratio: 78.81x
• ROCE (FY24): 14.39% | ROE (FY24): 46.09%
• Annualized EPS (Latest FY): ₹10.25 | P/E Ratio (Latest FY): 22.82x

Given the high valuation and poor listing performance, experts advise investors to avoid Nukleus Office Solutions IPO for short-term listing gains or long-term investment. Investors should monitor future earnings growth before considering any position in the stock.

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