Smartworks Ends First Trading Session 15% Above IPO Price

After listing at a 7% premium to its IPO price, shares of coworking major Smartworks maintained bullish momentum throughout the day, touching an intraday high of 15% at INR 469.00.

The company’s stock ended its debut trading session on the BSE at INR 445.10, up 9.3% from the issue price of INR 407 and 2% higher than its listing price.

At the end of the day, Smartworks’ market capitalisation stood at $590 Mn (approximately INR 5,079.99 Cr), compared to its IPO valuation of $540 Mn (INR 4,650 Cr) at the upper end of issue price.

The bumper listing came just days after Smartworks’ IPO closed with a strong oversubscription of 13.45X on July 14, led largely by Qualified Institutional Buyers (QIBs).

Smartworks had set a price band of INR 387 to INR 407 for its IPO, which comprised a fresh issue of shares worth up to INR 445 Cr and an offer for sale (OFS) of up to 33.79 Lakh shares.

Brokerages Outlook For Smartworks

Brokerage firms like Bajaj Brokerage and Ventura have offered their views on Smartwork’s IPO.  Ventura recommended that investors should monitor PBT turning positive with economies of scale improving further. 

Smartwork’s operating revenue stood at INR 1,374.1 Cr in FY25, up 32.3% from INR 1,039.4 Cr a year ago. Smartworks’ top line growth was offset by rising expenditures. Its net loss rose 26.5% to INR 63.2 Cr in FY25 from INR 49.9 Cr in FY24. 

Bajaj Broking said that Smartwork’s focus on MNC customers with long-term contracts has yielded the desired benefits. The company has reported top-line growth with cash EBITDA at gross levels.

“The company operates with a high lease liability due to its long-term, fixed-cost lease agreements across multiple centres. As a result, it incurs significant interest expenses and depreciation charges under the ‘Right-of-Use’ (ROU) asset accounting treatment, in accordance with Ind AS 116. This accounting structure impacts the Company’s EBITDA positively (as lease rentals are not included) but results in elevated finance costs and depreciation expenses, thereby exerting pressure on its net profitability,” Bajaj added.

In terms of risk factors, the brokerage noted that 75.19% of Smartworks’ rental revenue comes from just four key cities. Besides, its heavy dependence on large clients requiring 300+ seats increases business concentration risk. 

The failure to secure suitable properties may hinder growth and profitability. Moreover, past losses and negative cash flows may persist in the future.

Founded in 2016 by Neetish Sarda and Harsh Binani, Smartworks is a coworking startup based out of Gurugram. It leases large buildings from landlords, converts them into campuses, and then rents them out to large enterprises. It maintains an average lease tenure of 48 months and currently manages 10 Mn sq ft of space.

Beyond leasing, Smartworks earns a small portion of its income from services such as meeting rooms, internet access, parking, electricity, and other client-used amenities.