Smartworks Coworking Spaces Limited, India’s leading provider of Customised Managed Workspace Solutions, has launched its Initial Public Offering (IPO) to raise ₹582.56 Crores via the Book Built Issue route. The issue opened for subscription on July 10, 2025, and will close on July 14, 2025. The allotment is expected on July 15, 2025, with a planned listing on BSE and NSE around July 17, 2025.

About the Company

Smartworks delivers Customised Managed Workspace Solutions designed to meet the specific needs of mid-to-large Enterprises seeking fully serviced, aesthetically pleasing, and tech-enabled office environments.

Smartworks provides daily life and aspirational amenities to employees, supporting productivity and employee satisfaction. Their business model focuses on value-centric pricing and delivering a superior office experience compared to traditional workspaces.

Key Client Segments include:

• Indian Corporates

• Multinational Companies (MNCs) operating in India

• Startups

Smartworks has successfully built a diverse and growing client base, supported by its premium service offerings and strong brand positioning in the flexible workspace market.

Promoters and Management

The company is promoted by Neetish Sarda, who has over nine years of experience in the flexible workspace industry.

• Neetish Sarda: Specialist in flexible workspace design and business growth.

• Harsh Binani: With 14 years of experience in management consulting and flexible workspace industry.

• Saumya Binani: Brings further operational expertise.

This leadership team has guided Smartworks to become one of India’s leading players in the premium coworking segment.

IPO Details at a Glance

• Issue Size: ₹582.56 Crores

  • Fresh Issue: ₹445.00 Crores (10.93 lakh shares)

  • Offer for Sale (OFS): ₹137.55 Crores (33.79 lakh shares)

• Price Band: ₹387 to ₹407 per equity share

• Market Capitalisation at ₹407/share: ₹4,644.81 Crores

• Lot Size: 36 shares

  • Retail Minimum Investment: 1 lot (₹14,652)

  • HNIs Minimum Investment: 14 lots (504 shares = ₹2,05,128)

• IPO Open Date: July 10, 2025

• IPO Close Date: July 14, 2025

• Tentative Allotment Date: July 15, 2025

• Tentative Listing Date: July 17, 2025

• Exchange: BSE and NSE

Anchor Investors Participation

Smartworks successfully raised ₹173.64 Crores from Anchor Investors at ₹407 per share, allocating 42,66,378 equity shares in consultation with the Book Running Lead Managers.

This significant anchor book shows that institutions see potential in the company's growth model, despite industry challenges.

Book Running Lead Managers and Registrar

• Lead Managers:

  • JM Financial Limited

  • BOB Capital Markets Limited

  • IIFL Capital Services Limited (formerly IIFL Securities)

  • Kotak Mahindra Capital Company Limited

• Registrar: MUFG Intime India Private Limited (formerly Link Intime India)

These top-tier intermediaries reflect the credibility and seriousness of the IPO process.

Grey Market Premium (GMP) Insight

As of July 09, 2025, the Grey Market Premium (GMP) for Smartworks Coworking Spaces IPO is ₹0, indicating no premium or expected listing gains.

This flat GMP suggests limited speculative interest and reflects investor caution about the company’s profitability and pricing.

Live Subscription Status

As of 11:30 AM on July 14, 2025 (final day), the IPO was subscribed 0.52 times, indicating underwhelming demand relative to the issue size.

This low subscription level could point to investor concerns about:

• Financial losses

• Competitive market

• Valuation sensitivity

Company’s Financial Performance

Smartworks has demonstrated strong revenue growth, but profitability remains a challenge. Here’s a deep dive:

• Revenues from Operations:

  • FY23: ₹7,440.70 Million

  • FY24: ₹11,131.10 Million

  • FY25: ₹14,096.69 Million

• EBITDA:

  • FY23: ₹4,566.76 Million

  • FY24: ₹7,334.16 Million

  • FY25: ₹8,928.77 Million

While revenue and EBITDA show solid growth, the company continues to report net losses:

• Profit After Tax (PAT):

  • FY23: ₹-1,010.46 Million

  • FY24: ₹-499.57 Million

  • FY25: ₹-631.79 Million

This sustained negative PAT reflects high operating costs, debt servicing, and expansion expenses.

Valuation Metrics

• Pre-Issue EPS (FY24): ₹ -6.18

• Post-Issue EPS (FY24): ₹ -5.54

• Pre-Issue P/E Ratio: -65.85x

• Post-Issue P/E Ratio: -73.52x

• Industry P/E Ratio: 63x

These negative EPS and P/E numbers indicate unprofitability, making the IPO fully priced and risky for investors seeking near-term returns.

Return Ratios

• ROCE (FY24): 42.30%

• ROE (FY24): -80.00%

• RoNW: -58.76%

While ROCE is healthy, negative ROE and RoNW indicate equity erosion and ongoing losses at the net level.

Objectives of the IPO

Net Proceeds from the IPO will be used for:

1. ₹1,140.00 Million – Repayment/prepayment/redemption of certain borrowings.

2. ₹2,258.40 Million – Capital expenditure for fit-outs in new centres and security deposits.

3. General Corporate Purposes – Including working capital and operational needs.

These objectives highlight Smartworks’ focus on expansion and debt reduction, aiming to strengthen its financial position.

Strengths of Smartworks Coworking Spaces Ltd

• High-Quality Workspaces: Focus on tech-enabled, premium office environments.

• Large and Diverse Client Base: Including Indian corporates, MNCs, and startups.

• Strong Revenue Growth: CAGR in revenues and EBITDA over past three years.

• Experienced Promoters: Deep understanding of flexible workspace industry.

• Anchor Investor Support: Significant allocation at the upper price band.

Risks and Considerations

• Consistent Net Losses: Despite revenue growth, profitability remains negative.

• Low Subscription Demand: Early signals indicate subdued investor interest.

• High Competition: Co-working market has low entry barriers and intense price competition.

• Economic Sensitivity: Demand depends on corporate office trends and economic cycles.

• Flat GMP: Suggests market uncertainty about listing gains.

GMP Trend and Listing Outlook

With ₹0 GMP, there is no market premium suggesting no listing gain expectation. Investors should be cautious:

• Listing price may remain near IPO price.

• Possibility of discount listing exists if demand stays weak.

• Real valuation discovery will depend on post-listing performance.

Investor Perspective

Smartworks IPO offers an opportunity to invest in India’s premium managed workspace sector, riding on enterprise demand for flexible offices.

However, investors must weigh:

• Revenue growth vs. profitability risks.

• Heavy expansion costs.

• Negative earnings and high valuation multiples.

• Weak subscription trend indicating market skepticism.

Given these factors, risk-averse investors may want to avoid or wait for listing price discovery before entering.

Conclusion

Smartworks Coworking Spaces Limited IPO is best suited for long-term investors who understand the flexible workspace industry’s growth potential and are comfortable with operating losses and valuation risks.

For short-term investors seeking listing gains, the flat GMP and weak subscription suggest caution.

Overall, the IPO reflects ambitious growth plans but uncertain near-term profitability, making it a high-risk, high-reward bet in India’s dynamic commercial real estate sector.

Disclaimer:
This analysis is for educational and informational purposes only. It does not constitute investment advice or a solicitation to buy or sell any securities. Investors should perform their own due diligence or consult a SEBI-registered financial advisor before making any investment decisions. All data is based on information available as of the publication date and may be subject to change.

The Upcoming IPOs in this week and coming weeks are Savy Infra, Monika Alcobev, NSDL.

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