WeWork India IPO Back On Track

SUMMARY

As per the latest update on SEBI website, the regulator is currently processing or re-evaluating the coworking major’s DRHP

As per reports, the reason behind SEBI’s action was a delay in exchange disclosure by Embassy Office Parks, a company backed by WeWork India’s parent Embassy Group

WeWork India’s IPO will comprise solely an offer-for-sale (OFS) component of up to 4.4 Cr shares

Over three months after it kept WeWork India’s draft IPO papers in abeyance, the markets regulator has reinstated the company’s public listing bid.

As per the latest update on SEBI website, the regulator is currently processing or re-evaluating the coworking major’s DRHP.

In SEBI parlance, kept in abeyance means that the regulator’s observations on draft papers are temporarily put on hold, usually pending investigation or regulatory action.

It is not clear as to why SEBI kept the WeWork India IPO in abeyance. A report by NDTV Profit said that the reason behind it was the delay in exchange disclosure by Embassy Office Parks, a company backed by WeWork India’s parent Embassy Group, pertaining to a case involving its ousted CEO Aravind Maiya.

WeWork India’s IPO will comprise solely an offer-for-sale (OFS) component of up to 4.4 Cr shares. The company’s parent company Embassy Buildcon LLP will sell 3.4 Cr shares, while global coworking space provider WeWork’s affiliate 1 Ariel Way Tenant will offload over 1 Cr shares in the company.

Moving ahead, whether the company will issue an addendum to its DRHP is yet to be decided. It is planning to hold talks with its IPO bankers and take a decision in due course. JM Financial, ICICI Securities, Jefferies India, Kotak Mahindra, and 360 ONE WAM are the book-running lead managers for the issue.

With this, WeWork India would be the third coworking space company to become publicly listed in India. While Mumbai-based Awfis was the first coworking space startup to get listed on the bourses last year, Gurugram-based Smartworks is set to become the second such entity to get listed.

The Smartworks IPO is set to open for subscriptions on July 10 and conclude on July 14. The IPO will comprise a fresh issue of up to INR 445 Cr and an OFS component of up to 33.79 Lakh shares.

Notably, WeWork India is the largest coworking space provider in India, in terms of revenue. WeWork India’s operating FY24 revenue zoomed 27% YoY to INR 1,665.1 Cr, while its losses shrank by about 8% YoY to INR 135.8 Cr.

In comparison, Awfis reported an operating revenue of INR 849 Cr in FY24, while Smartworks’ operating revenue stood at INR 1,039.4 Cr in the fiscal year.

In the coworking space, the SEBI is reviewing IPO draft papers of Ahmedabad-based DevX and WeWork India.