BENGALURU: WeWork India Management shares made their trading debut on Friday, closing down 3% and valuing the co-working space provider at approximately 84.25 billion rupees (around $950 million). Investors expressed concerns regarding high valuations and governance issues.
The shares opened just above the IPO offer price of 648 rupees before dipping as much as 5.2% to 614.25 rupees.
The company, which licenses its brand from the now-bankrupt WeWork Global, raised approximately $338.16 million in its IPO, which was subscribed 1.15 times, largely driven by institutional interest.
“Investors are uncomfortable with the valuation, and WeWork is feeling the pressure,” commented Aishvarya Dadeech, chief investment officer at Fident Asset Management. Furthermore, Dadeech highlighted that WeWork’s expected revenue growth of 22% from fiscal 2023 to 2025 is less appealing compared to listed competitors like Smartworks Coworking Spaces, IndiQube Spaces, and Awfis Space Solutions.
WeWork India’s listing coincided with a busy period for India’s primary market. For instance, LG Electronics India’s IPO attracted bids 54.02 times its offering, marking one of the most subscribed billion-dollar IPOs in nearly twenty years, while Tata Capital’s IPO garnered bids totaling $1.24 billion.
Beyond a competitive IPO landscape, WeWork India encounters more serious challenges, including corporate governance issues and uncertainties surrounding its operational sustainability and expansion funding amidst declining demand and increased competition from leaner, more profitable players.
Proxy advisor InGovern Research Services cautioned investors about WeWork India’s precarious financial state, noting negative cash flow, high lease liabilities, and a lack of fresh capital.
WeWork India has yet to respond to requests for comment.
The company operates flexible office spaces in eight major Indian cities and competes with firms such as Smartworks, which has seen a 35% rise since its July debut, and IndiQube Spaces, which initially fell 15% after its listing but has since rebounded, trading 4% above its listing price.
As per exchange data, Smartworks holds a market capitalization of 68.9 billion rupees, while IndiQube is valued at 47.6 billion rupees.
