The promoter group’s stake will fall to 58.3% after the IPO from 65.2%. The company reported a gradual increase in revenue and operating profit before depreciation and amortisation (Ebitda) for the past two years. However, it posted a net loss in each of the past three years. Smartworks’ fit-out cost per square feet is almost half of that of a typical flexible workspace centre and the company is expected to benefit from growing demand for managed workspaces. About 33% of its revenue comes from Pune, reflecting geographic concentration. Investors with high-risk appetite may consider the IPO after weighing these factors.
Business
Incorporated in 2015, Smartworks offers fully serviced, tech-enabled office campuses. The company caters to mid-to-large enterprises, including Indian corporates, MNCs and startups in 15 Indian cities. It also provides workspace solutions in Singapore to 83 clients by taking two centres on lease with a super built-up area of 35,606 sq ft.Financials
Revenue from operations grew 24.5% annually from FY23 to ₹1,374.1 crore in FY25. Ebitda rose 26.4% to ₹857.3 crore, while after adjusting for cash outflow for lease liabilities, Ebitda expanded 67.9% to ₹172.2 crore. Ebitda margin increased to 62.4% in FY25 from 59.6% in FY23. Net debt increased to ₹299.3 crore from ₹274.05 crore in FY23. Net debt-equity on a post IPO basis is 0.5 compared with 0.8 in FY23 (pre-IPO).
Valuation
Price-to-earnings multiple will not help since the company has not recorded a profit for the full year. The price-to-sales (P/S) multiple works out to 3.4 compared with 3.7 for its only listed rival, Awfis Space Solutions, which reported revenue of ₹1,207.5 crore in FY25 when it also turned profitable with a net profit of ₹67.9 crore.
