Smartworks Coworking Spaces IPO: A Closer Look at the Initial Public Offering
On July 10, 2023, Smartworks Coworking Spaces launched its initial public offering (IPO), which quickly garnered attention in the financial markets. By 1:06 PM on the first day of bidding, the IPO was subscribed 23%, with bids for 24.35 lakh shares against a total issue size of 1.04 crore shares. This early interest reflects the growing demand for flexible workspace solutions in India.
Subscription Breakdown
The demand for Smartworks’ IPO was notably led by non-institutional investors (NIIs), who subscribed to 37% of their allotted quota. Retail investors also showed significant interest, with a subscription rate of 30%. The employee reserved portion saw a subscription of 32%. However, the qualified institutional buyer (QIB) segment had yet to see any bids, indicating a cautious approach from institutional investors at this early stage.
Financial Goals and Structure
Smartworks aims to raise between Rs 576 crore to Rs 583 crore through a combination of fresh issues and an offer for sale. The public issue is set to close on July 14, with a listing anticipated on July 17 on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The IPO comprises a fresh issue of shares worth Rs 445 crore and an offer for sale of 33.79 lakh equity shares. The price band is fixed at Rs 387 to Rs 407 per share, with an employee discount of Rs 37. Investors can bid in lots of 36 shares and multiples thereof. Ahead of the issue opening, the company’s grey market premium (GMP) was around 8% over the issue price, suggesting positive sentiment among investors.
Company Overview
Founded in 2015, Smartworks has emerged as India’s largest managed campus operator by leased area, boasting over 8.99 million square feet across 50 centers in 15 Indian cities as of March 31, 2025. The company also operates two centers in Singapore, targeting mid-to-large enterprises across various sectors, including IT, BFSI, and startups. Smartworks employs a straight lease model complemented by newer variable rental contracts, which allows for flexibility in its offerings.
Utilization of IPO Proceeds
A significant portion of the IPO proceeds—Rs 225.8 crore—will be allocated towards fit-outs and security deposits for new centers, while Rs 114 crore is earmarked for debt repayment. The remaining funds will be used for general corporate purposes, positioning Smartworks for future growth and expansion.
Financial Performance
Smartworks has demonstrated rapid growth in its financials, with revenue from operations increasing from Rs 711.39 crore in FY23 to Rs 1,374.05 crore in FY25. EBITDA also more than doubled during this period, reaching Rs 857.26 crore. However, the company remains in the red, reporting a net loss of Rs 63.17 crore in FY25, although margins have shown improvement.
As of March 2025, Smartworks boasted an occupancy rate of 83.1% across its operational centers, serving a client base of 738 enterprises with a seat capacity exceeding 200,000. This strong occupancy rate underscores the demand for its services in an increasingly competitive market.
Value-Added Services
In addition to its core offerings, Smartworks provides value-added services such as wellness zones, convenience stores, and design-build (FaaS) solutions. These additional services enhance the overall experience for clients, making Smartworks a compelling choice for businesses seeking flexible workspace solutions.
Market Outlook
With a growing footprint and a focus on capital-efficient leasing strategies, Smartworks’ IPO is poised to attract significant attention from investors looking to gain exposure to India’s rapidly evolving commercial real estate and flexible workspace segment. The issue is being managed by a consortium of lead book-running managers, including JM Financial, BOB Capital, IIFL Capital, and Kotak Mahindra Capital.
Conclusion
As Smartworks Coworking Spaces embarks on this IPO journey, the market will be closely watching its progress. The initial subscription figures indicate a positive reception, particularly among non-institutional and retail investors. With a robust business model and a commitment to innovation, Smartworks is well-positioned to capitalize on the growing demand for flexible workspaces in India.