The company has fixed a price band between ₹387 and ₹407 per share for its IPO. Investors can bid for a minimum of 36 shares and its multiples thereof.
Smartworks Coworking Spaces IPO: What brokerages say
SBI Securities: Avoid
The brokerage has recommended investors to ‘Avoid’ the issue and track company’s performance post listing especially focusing on its capital efficiency through variable rental business model and managed contracts. It believes companies like Awfis Space Solutions offers better investment opportunity within the coworking space, which is currently profitable and trades at FY25 EV/Adj. EBITDA of 26.5x.
Anand Rathi: Subscribe for long term
The brokerage believes that the IPO is fully priced and has recommended a ‘Subscribe-Long term’ rating to the IPO.
The company is shifting to an asset-light strategy through variable rental and management contracts, improving capital efficiency. Additional revenue streams like value-added services and Fit-out-as-a-Service further strengthen its business.
“At the upper price band, the company is valuing at P/S of 3.3x with EV/EBITDA of 9.7x and market cap of ₹4,644.8 crore post issue of equity shares,” the brokerage said.
Smartworks Coworking Spaces IPO: Anchor investors
Ahead of the issue launch, the company has raised ₹173.6 crore from 12 institutional investors via anchor book on July 9.
Tata Mutual Fund, Axis New Opportunities AIF, Aditya Birla Sun Life Insurance Company, Baroda BNP Paribas Mutual Fund, Sageone, SBI General Insurance Company, Trust Mutual Fund, BNP Paribas, and Societe Generale are among 12 institutional investors participated in the anchor book.
Smartworks Coworking Spaces IPO: Issue size
The company has revised its IPO size downward. The fresh issue has been reduced to ₹445 crore from the earlier planned ₹550 crore, while the offer for sale (OFS) by promoters has been cut to 33.79 lakh shares from 67.59 lakh shares.
The implied market capitalisation after listing could be between ₹4,394 crore and ₹4,645 crore at the upper end.
Neetish Sarda, Harsh Binani, Saumya Binani, NS Niketan LLP, SNS Infrareality LLP and Aryadeep Realstates Private Limited are the promoters of the company.
The promoter holding will decline from 65% to 59% post IPO.
Investor Keppel Land and promoters decided to cut the OFS selling by half. Investor Keppel Land will hold 15% stake in the company as against 19% before.
Marquee investors in the company include family offices of Ananta Capital, Hexaware, Enam group, Deutsche Bank who owns 1% stake in the company.
Madhu Kela was an angel investor who invested in 2017.
Smartworks Coworking Spaces IPO: Structure
Nearly 50% of the offer will be allocated to qualified institutional buyers, 15% to non-institutional bidders, and the remaining 35% to retail investors.
Smartworks Coworking Spaces IPO: Objective
About ₹226 crore from the total proceeds will be utilised for capital expenditure related to the fit-outs in new centres and security deposits for these new centres, ₹114 crore will be allocated for the payment of loans, and the remaining funds will be utilised for general corporate purposes.
Company overview
Smartworks Coworking Spaces is engaged in the business of customised managed workspace solutions, offering fully serviced, tech-enabled office environments with aesthetic designs and essential amenities to meet the specific needs of enterprises and their employees.
It specialises in leasing large, bare-shell properties in prime locations and transforming them into fully serviced, tech-enabled campuses with modern amenities.
These campuses include cafeterias, sports zones, gyms, medical centres, and more, offering a modern and attractive work environment. The company cater to businesses of all sizes, with a focus on mid-to-large companies that need over 300 seats.
The company is concentrated in various cities, including Bengaluru, Mumbai Metropolitan Region, Hyderabad, Gurugram and Chennai.
Between FY23 and FY25, Smartworks expanded its operations by adding 2.83 million square feet of space under management, achieving a CAGR (compound annual growth rate) of 20.80%.
Adjusted EBITDA has grown by more than 3.5X times from about ₹36 crore to about ₹172 crore versus in FY25 from FY23.
Net debt stands at about ₹300 crore.
JM Financial is the book-running lead manager of the Smartworks Coworking IPO, while MUFG Intime India (Link Intime) is the registrar for the issue.
The allotment for the Smartworks Coworking IPO is expected to be finalised on July 15. The IPO will be listed on BSE, NSE with a tentative listing date fixed as July 17.
