On Friday, the second day of the offer, the issue was subscribed by 1.15 times, with non-institutional investors (NIIs) in the lead with 1.79 times subscription, followed by the retail investors who subscribed to the issue by 1.18 times.
The qualified institutional buyers subscribed to the issue by 63%.
Smartworks Coworking Spaces IPO details
Smartworks Coworking Spaces aims to raise Rs 576-583 crore through a mix of fresh issue and offer-for-sale (OFS). The IPO, open for subscription until July 14, is slated to list on both BSE and NSE on July 17.
The issue comprises a fresh equity issue of Rs 445 crore and an offer for sale (OFS) of 33.79 lakh shares.
The company has set a price band of Rs 387–407 per share, with a Rs 37 per share discount offered to employees. Investors can bid in lots of 36 shares and in multiples thereafter.
Use of funds
According to the filing, proceeds from the IPO will be utilized as follows:
- Rs 225.8 crore for fit-outs and security deposits at new centres
- Rs 114 crore for debt repayment
- The remainder will be allocated towards general corporate purposes
Smartworks Coworking Spaces profile
Founded in 2015, Smartworks Coworking Spaces is India’s largest managed workspace provider by leased area, operating over 8.99 million sq ft across 50 centres in 15 Indian cities as of March 31, 2025. The company also has two centres operational in Singapore. It primarily caters to mid-to-large enterprises in sectors like IT, BFSI, and startups.
The company operates primarily on a straight lease model, but is gradually shifting towards variable rental agreements to improve cost efficiency.
Smartworks’ business model revolves around providing customized managed office spaces with technology-driven services, aesthetic design, and enterprise-focused amenities. The firm also offers value-added services such as wellness zones, convenience stores, and design-build (FaaS) solutions.
Smartworks Coworking Spaces financials
The company has demonstrated strong revenue growth, with operating revenue surging from Rs 711.39 crore in FY23 to Rs 1,374.05 crore in FY25. Its EBITDA improved to Rs 857.26 crore during FY25. However, despite improving margins, the company remains loss-making, posting a net loss of Rs 63.17 crore for FY25.
As of March 2025, Smartworks reported an occupancy rate of 83.1%, catering to 738 enterprise clients across its facilities, with a total seating capacity exceeding 2 lakh.
Analyst recommendations
Opinions remain divided among brokerage houses:
- Anand Rathi assigned a “Subscribe – Long Term” rating, highlighting that at the upper price band, the company’s valuation stands at a price-to-sales (P/S) ratio of 3.3x and an enterprise value-to-EBITDA (EV/EBITDA) multiple of 9.7x, post issue market capitalization pegged at Rs 4,644.8 crore.
- SBI Securities, however, issued an “Avoid” recommendation, citing stronger alternatives like Awfis Space Solutions, which is profitable and trades at a significantly higher FY25 EV/Adj. EBITDA multiple of 26.5x.
- Bajaj Broking recommended a “Subscribe for Long-Term”, citing Smartworks’ leadership position and focus on long-term contracts with multinational clients. The brokerage noted that while the company has posted positive cash EBITDA, reported losses are driven by provisions under accounting standards like Ind AS 116, which recognize lease liabilities as fixed costs, inflating interest and depreciation expenses.
Book running lead managers
JM Financial, BOB Capital Markets, IIFL Securities, and Kotak Mahindra Capital are managing the public issue.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
