Coworking Startup Smartworks Gears Up For IPO, Files Draft Papers With SEBI

Just over a month after turning into a public entity, coworking startup Smartworks has filed its draft red herring prospectus (DRHP) with the capital markets regulator SEBI to raise funds through an initial public offering (IPO).

As per the DRHP available on its website, the company’s IPO comprises a fresh issue of equity shares worth INR 550 Cr and an offer for sale (OFS) of 67.49 Lakh equity shares by promoters.

The startup also intends to raise INR 110 Cr through a pre-IPO placement prior to filing its Red Herring Prospectus (RHP).

The net proceeds from the fresh issue, excluding the offer for sale, will be used by the company for capital expenditure related to fit-outs in the new centres, security deposits for the new centres, and other general corporate purposes. Additionally, the proceeds will be allocated towards the repayment, prepayment, or redemption of certain borrowings.

To be precise, INR 140 Cr will be allocated for debt repayment, and INR 282.3 Cr will be invested in capital expenditure.

The OFS component sees promoters NS Niketan LLP, SNS Infrarealty LLP and Space Solutions India Pte. Ltd. selling shares totalling 9.8 Lakh, 6.2 Lakh and 51.59 Lakh, respectively.

Notably, equity shares held on a fully diluted basis by NS Niketan LLP, SNS Infrarealty LLP, Neetish Sarda, and Soumya Binani are 4.3 Cr, 2.7Cr, 3.2K and 3.1K, respectively.

The book-running lead managers for the IPO are JM Financial Limited, BOB Capital Markets Limited, IIFL Securities Limited and Kotak Mahindra Capital Company Limited.

Upon receiving the market regulators’ approval, the startup will list its shares on the NSE and the BSE.

In its DRHP, the startup also outlined its financial stats for the financial year 2023-24 (FY24). The company was able to trim down its losses for the year under review, reducing it to INR 49.9 Cr in FY24 from 101.46 in the year ago period.

However, its revenue from operations zoomed 46% to INR 1039.3 Cr in FY24 from INR 711.3 Cr in FY23. Its expenses also rose in the fiscal, growing 34% year on year to INR 1180.7 Cr from INR 880.2 Cr it spent in FY23.

Compared to the same quarter last year, its total borrowings also decreased in FY24 at 427.3 Cr from 515.3 Cr in FY23.

This development comes a month after the coworking startup changed its name to Smartworks Coworking Spaces Ltd from Smartworks Coworking Spaces Private Ltd earlier. 

Earlier in June, Smartworks founder Sarda outlined that the company has raised $20.24 Mn (around  INR 168 Cr) this year so far from investors like Keppel Ltd, Ananta Capital Ventures Fund I, Plutus Capital LLC, family trusts, and a host of individual investors.

Not to mention, Smartworks bagged $25 Mn in its Series A funding round from Keppel Land back in 2019. 

Founded in 2016 by Neetish Sarda and Harsh Binani, Smartworks is a shared workspace provider that offers customisable coworking solutions for enterprises. 

The startup claims to have over 8 Mn sq. ft. of office space across 40+ locations spanning 14 cities including Bengaluru, Kolkata, Delhi NCR and Mumbai. It claims to cater to more than 600 enterprises, including Honeywell, Starbucks Coffee, DHL, and Moglix. 

It competes against the likes of Awfis, WeWork India and IndiaQube. 

The latest development comes against the backdrop of a growing number of Indian startups either gearing up for or making their market debut in recent times. For instance, FirstCry, Ola Electric and Unicommerce were listed this month.

Meanwhile, with just ten months into 2024, we have 10 new-age tech companies like Go Digit General Insurance, FirstCry, Unicommerce, TBO Tek, Ola Electric, Awfis, ixigo, Menhood, TAC Security and Trust Fintech already listed on the exchanges.

Going ahead, we are to witness the likes of logistic startup Shadowfax, foodtech major Swiggy making their market debut.