Smartworks Coworking Spaces Files for ₹550 Crore IPO
Smartworks Coworking Spaces, a leading flexible office provider based in Gurugram, has filed preliminary papers with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) aiming to raise ₹550 crore. This move marks a significant step for the company as it seeks to strengthen its financial foundation and support its growth ambitions.
IPO Details
The proposed IPO will consist of two components: a fresh issuance of equity shares worth ₹550 crore and an offer-for-sale (OFS) of 67.59 lakh equity shares by existing shareholders. The Draft Red Herring Prospectus (DRHP) reveals that the OFS will involve the sale of shares by several key stakeholders. NS Niketan LLP and SNS Infrarealty LLP will collectively sell 16 lakh shares, while investor Space Solutions India Pte will sell the remaining 51.59 lakh shares.
Use of Proceeds
The funds raised from the IPO will be allocated across several key areas. A substantial portion, ₹140 crore, will be used to repay existing loans. Another ₹282.30 crore will be directed towards capital expenditures and security deposits for new office centers. The remaining funds will be utilized for general corporate purposes. This allocation reflects Smartworks' strategy to leverage the IPO proceeds for both immediate financial needs and long-term growth.
Additionally, Smartworks is considering a pre-IPO placement to raise up to ₹110 crore. If this placement occurs, the raised amount will be deducted from the total fresh issue size. Earlier this year, the company successfully raised ₹168 crore, indicating its proactive approach in securing capital ahead of its public offering.
Investment Banking Support
To facilitate the IPO, Smartworks has appointed a group of leading financial institutions as book-running lead managers. JM Financial Ltd, BOB Capital Markets Ltd, IIFL Securities Ltd, and Kotak Mahindra Capital Company Ltd will oversee the IPO process and play a crucial role in its execution. Their involvement is expected to provide significant expertise and support to ensure the successful completion of the offering.
Industry Context
The filing of Smartworks' IPO papers follows a similar move by its peer, Awfis Space Solutions, which went public in May 2024. Awfis's IPO included a fresh share sale of ₹128 crore and an offer-for-sale of up to 1.22 crore equity shares, valued at ₹470.93 crore at the upper price band. This offering was well-received, highlighting strong investor interest in the coworking sector.
Future Outlook
Smartworks' IPO is a significant development in the coworking industry, reflecting robust investor confidence and interest in flexible office solutions. The company's plan to use the IPO proceeds for loan repayment, capital expenditures, and general corporate purposes indicates a strategic approach to enhancing its market position and supporting its expansion plans.
Image source- smartworksoffice
