WeWork India Gets SEBI Nod For IPO

SUMMARY

WeWork’s IPO will comprise solely an OFS component of up to 4.4 Cr equity shares

Company’s parent entity and its affiliate will offload shares as a part of this IPO

WeWork has onboarded Financial Limited, ICICI Securities Limited, Jefferies India Private Limited, among others to helm its IPO

Coworking space giant WeWork India Management has secured approval from the capital markets regulator SEBI to launch its market debut.

WeWork’s initial public offering (IPO) will comprise solely an offer-for-sale (OFS) component of up to 4.4 Cr equity shares. Out of these, the company’s parent entity Embassy Buildon LLP will offload 3.3 Cr shares and the rest of the equity shares will be diluted by WeWork’s affiliate 1 Ariel Way Tenant Limited.

WeWork has onboarded JM Financial Limited, ICICI Securities Limited, Jefferies India Private Limited, Kotak Mahindra Capital Company Limited and 360 ONE WAM Limited as the book running lead managers to helm the public listing.

WeWork India filed its DRHP with the capital markets regulator in February. However, SEBI put a temporary hold on the company’s document for unknown reasons.

A few days back, SEBI started revaluating the company’s documents.

WeWork India’s Parent Transition

Initially, WeWork India operated as the Indian arm of US-based coworking space provider WeWork Inc.

However, WeWork Inc filed for bankruptcy In November 2023.

The company, once valued at $47 Bn, started struggling after its stock market debut in October 2021. These hurdles stemmed from substantial financial losses, corporate governance issues, and the leadership approach. Besides, COVID-19 pandemic was a major hit on the real estate market, resulting in loss of financial resources for the company.

While WeWork Inc managed to exit bankruptcy on the back of court-approved reorganisation plan, WeWork India still grew as the US-based company only owned 27% in the latter. Rest of stake in WeWork India is owned by the Embassy Group, a prominent office development company in India.

Notably, WeWork Inc was supposed to exit WeWork India completely after the Competition Commission of India (CCI) approved the proposal in early 2024. However, the deal fell through due to valuation mismatch.

Now WeWork Inc. owns stake in WeWork India via its affiliate and investor shareholder 1 Ariel Way Tenant Limited.

WeWork’s IPO comes at a time when its competitor Smartworks recently ended the third day of its bidding process, with public listing scheduled on July 17. The IPO of Smartworks closed with an oversubscription of 13.45X, with investors bidding for 13.9 Cr shares as against 1.04 Cr shares on offer.

Awfis was the first coworking space startup in India to hit the bourses.