Smartworks IPO: Issue Subscribed 72% On Day 2 So Far

SUMMARY

Non-institutional investors (NIIs) showed the maximum interest, with the portion reserved for them seeing 1.79X subscription

Retail investors’ portion was subscribed 118%, receiving bids for 60.82 Lakh shares against 51.73 Lakh shares on offer

Qualified institutional buyers (QIBs), who showed a muted response on Day 1, increased their participation on the second day with 63% subscription

Update | July 11, 7:52 PM

Coworking major Smartworks’ IPO saw a warm response from investors on the second day and was fully subscribed. The issue was oversubscribed 1.15X at the end of the day.

According to the BSE data, the public issue received cumulative bids for 1.20 Cr shares against the total offering of 1.04 Cr shares.

Non-institutional investors (NIIs) showed the maximum interest, with the portion reserved for them seeing 1.79X subscription. NIIs placed bids for 39.75 Lakh shares as against 22.17 Lakh shares on offer.

Retail investors’ portion was subscribed 118%, receiving bids for 60.82 Lakh shares against 51.73 Lakh shares on offer. The company’s employees bid for 1.08 Lakh shares against 1.07 Lakh offered to them.

Qualified institutional buyers (QIBs), who showed a muted response on Day 1, increased their participation on the second day. This category received bids for 18.33 Lakh shares against 29.03 Lakh on offer, translating to 63% subscription.

Original | July 11, 12:32 PM

After ending the first day of its IPO with an overall subscription of 50%, driven primarily by the enthusiasm of non-institutional investors (NIIs), the second day of Smartworks’ bidding got off to a good start with 72% subscription at 12:03 PM.

According to BSE data, the IPO received total bids for 72.95 Lakh shares against 1.04 Cr shares on offer.

The portion reserved for NIIs saw an overwhelming response, with 1.3X subscription. It received bids for 30.04 Lakh shares as against 22.17 Lakh shares on offer.

Following NIIs, retail investors showed strong interest, bidding for 44.27 Lakh shares against 51.73 Lakh shares reserved for them, an 86% subscription.

Trailing behind this was the employee portion, which got subscribed 73%, as 77.7K employees bid for 1.07 Lakh shares on offer.

Qualified institutional buyers (QIBs) maintained their lukewarm response even on Day 2, receiving bids for 5,724 shares out of the 29.03 Lakh shares allocated to them.

Founded in 2016 by Neetish Sarda and Harsh Binani, Smartworks is a managed workspace provider. 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.

Smartworks has set a price band of INR 387 to INR 407 for its IPO, which comprises a fresh issue of shares of up to INR 445 Cr and an OFS component of up to 33.79 Lakh shares. The bidding will close on July 14, with the company’s shares expected to list on July 17.

At the upper end of the price band, Smartworks will be valued at about INR 4,650 Cr (around $540 Mn).

The IPO proceeds will be used to repay outstanding borrowings, cover capital expenditure related to security deposits and support the development of new centres.

On July 9, Smartworks raised INR 173.64 Cr in its anchor round from marquee investors, including Tata Mutual Fund, Baroda BNP Paribas, Trust Mutual Fund, Aditya Birla Sun Life, Axis Mutual Fund, SBI General Insurance, Societe Generale, and Buoyant Capital.

On the financial front, the company’s net loss widened by 26.5% year-on-year (YoY) to INR 63.2 Cr in FY25, while its operating revenue grew 32% YoY to INR 1,374 Cr. Smartworks’s management has indicated that the company aims to achieve breakeven at the unit-building level within the next 12 months.