Smartworks Coworking Spaces Limited, known for providing customised managed workspace solutions, launched its Initial Public Offering (IPO) as a Book Built Issue, totaling ₹582.56 Crores. The issue includes a Fresh Issue of ₹445.00 Crores through 10.93 lakh shares and an Offer for Sale (OFS) of 33.79 lakh shares, amounting to ₹137.55 Crores.

The IPO opened for subscription on July 10, 2025, and closed on July 14, 2025. The price band has been set at ₹387 to ₹407 per share, and at the upper band, the market capitalization of Smartworks Coworking Spaces Limited stands at ₹4,644.81 Crores.

The minimum lot size for retail investors is 36 shares, requiring a minimum investment of ₹14,652, while High-Net-Worth Individuals (HNIs) need to invest in 14 lots (504 shares), which translates to ₹2,05,128.

The IPO is managed by JM Financial Limited, BOB Capital Markets Limited, IIFL Capital Services Limited, and Kotak Mahindra Capital Company Limited. The registrar for this issue is MUFG Intime India Private Limited (formerly Link Intime).

Weak Market Interest: Subscription Status

As of 11:30 AM on July 14, 2025, the Smartworks Coworking Spaces IPO had been subscribed only 0.52 times. This shows a subdued investor response, particularly surprising given the company's position in the high-demand coworking space sector.

This lukewarm subscription may be attributed to the company’s financials, losses, and valuation concerns, despite a substantial anchor investment of ₹173.64 Crores through allocation of 42,66,378 equity shares at the upper band of ₹407.

GMP Signals Investor Hesitancy

As of the latest available data, the Grey Market Premium (GMP) for Smartworks Coworking Spaces IPO stands at ₹0. This indicates that there is no expected premium on listing day, pointing to investor caution and low speculative interest.

GMP is unofficial and derived from unregulated channels. Though often used to estimate possible listing gains, it is not a reliable price discovery tool and should not be the sole basis for investment decisions.

Financial Overview

Smartworks is led by Neetish Sarda, who has over nine years of experience in the coworking space segment. He is supported by Harsh Binani, with fourteen years of experience in management consulting and flexible workspace strategy, and Saumya Binani.

The company's financials present a mixed picture with strong revenue growth but continued losses:

• Revenue from operations:

  • FY 2025: ₹14,096.69 Million

  • FY 2024: ₹11,131.10 Million

  • FY 2023: ₹7,440.70 Million

• EBITDA:

  • FY 2025: ₹8,928.77 Million

  • FY 2024: ₹7,334.16 Million

  • FY 2023: ₹4,566.76 Million

• Profit After Tax (PAT):

  • FY 2025: ₹ -631.79 Million

  • FY 2024: ₹ -499.57 Million

  • FY 2023: ₹ -1,010.46 Million

Despite consistent top-line growth, the company continues to post net losses, indicating issues in controlling operating costs or achieving break-even.

Valuation and Metrics

The pre-issue EPS is ₹ -6.18 and post-issue EPS is ₹ -5.54, reflecting the ongoing negative earnings.

• Pre-Issue P/E Ratio: -65.85x

• Post-Issue P/E Ratio: -73.52x

• Industry P/E Ratio: ~63x

Further, the Return on Capital Employed (ROCE) is 42.30%, but the Return on Equity (ROE) is negative at -80.00%, and Return on Net Worth (RoNW) is -58.76%. These negative indicators strongly signal valuation risk.

IPO Objectives

The company has outlined the following utilization for the Net Proceeds from the IPO:

1. ₹1,140.00 Million will go towards repayment or prepayment of borrowings, helping reduce the debt burden.

2. ₹2,258.40 Million is earmarked for capital expenditure, primarily for fit-outs and security deposits for new coworking centers.

3. The balance funds will be used for general corporate purposes.

Allotment & Listing

The IPO allotment date is Tuesday, July 15, 2025, and shares are expected to be listed on both the BSE and NSE on Thursday, July 17, 2025.

How to Check Allotment Status

Investors can check their IPO allotment status online by:

• Visiting the registrar's IPO allotment page

• Selecting Smartworks Coworking Spaces Limited IPO from the list

• Entering PAN, application number, or DP Client ID

• Submitting the form to view status

Conclusion

The Smartworks Coworking Spaces IPO shows low investor enthusiasm, with subscription at just 0.52x and no GMP movement, suggesting that investors are approaching the IPO with caution due to consistent financial losses and high valuation.

While the company shows robust revenue growth and strong EBITDA, its net losses and negative return ratios raise red flags for potential investors. Even though Smartworks is a leader in the managed office space industry with a growing footprint, the valuation seems steep, especially considering its loss-making status.

Unless the company demonstrates a swift turnaround to profitability, long-term investors may find it difficult to justify the price. For now, based on current fundamentals, we recommend investors to avoid this IPO for listing gains.

The IPO may still be relevant to long-term institutional investors willing to bet on India’s growing coworking demand, but retail investors and short-term participants should remain cautious.

Disclaimer: This review is strictly for educational and informational purposes. It does not constitute investment advice or recommendations. Investors must consult professional advisors and evaluate all aspects of the IPO before investing. The data presented is based on publicly available information as of the publishing date and is subject to change.

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