NEW DELHI: Smartworks Coworking Spaces has secured ₹173.64 crore from anchor investors prior to its initial public offering (IPO).
In a regulatory update released on Wednesday, Smartworks confirmed the allocation of 42,66,378 equity shares to anchor investors at ₹407 per share.
Among the allocated shares, 32.04% were designated for three domestic mutual funds, which utilized a total of four schemes.
These mutual funds are Tata Mutual Fund, Baroda BNP Paribas, and Trust Mutual Fund.
Other investors include Axis New Opportunities AIF – Series II, SBI General Insurance Co. Ltd, Aditya Birla Sun Life Insurance Co. Ltd, and Societe Generale, among others. Smartworks is set to enter the capital market on July 10 to initiate its IPO aiming to raise nearly ₹600 crore to facilitate business expansion and debt reduction.
Based in Gurugram, Smartworks is one of the top providers of managed flexible office spaces, currently operating 48 co-working centres with a seating capacity exceeding 1.9 lakh.
The company has established a price band of ₹387-407 per share for its IPO, which will conclude on July 14.
The size of the fresh issue has been revised down to ₹445 crore from an initial estimate of ₹550 crore, while the Offer For Sale (OFS) from promoters has decreased from 67.59 lakh shares to 33.79 lakh shares.
At the higher end of the price range, the IPO size is now projected at ₹583 crore, resulting in an estimated market valuation of around ₹4,645 crore.
Out of the proceeds from the fresh issue, Smartworks plans to allocate ₹226 crore for capital expenditures related to new centre fit-outs and security deposits.
Additionally, ₹114 crore will be directed toward loan repayments, while the remainder will be designated for corporate expenses. Proceeds from the OFS will benefit the promoters.
In terms of financial performance, Smartworks recorded a net loss of ₹63.17 crore in the last fiscal year due to higher expenses compared to income. The previous year’s net loss was ₹49.95 crore.
However, operating revenue increased to ₹1,374.05 crore in FY 2024-25 from ₹1,039.36 crore in the prior year.
“These losses are attributable to our total income being insufficient to cover expenses,” the company noted in its red herring prospectus (RHP) submitted to Sebi.
Smartworks aims to boost revenue and reduce proportional expenses in order to achieve profitability.
The company’s total consolidated debt was recorded at ₹382 crore as of April.
Smartworks leases office spaces from landlords and subsequently sub-leases these areas to corporations. It currently has an operational portfolio of 8.31 million square feet while another 0.7 million square feet is under fit-outs.
The company has leased an additional 1.7 million square feet from landlords but has yet to gain possession for setting up new centres.
The total portfolio is projected to surpass 10 million square feet, factoring in both fit-out areas and signed agreements.
