Wework India gets SEBI nod to launch IPO, promoters to sell shares to monetise investments

New Delhi: Co-working major WeWork India has received market regulator Sebi's go-ahead to launch its Initial Public Offering (IPO), enabling the promoters to monetise their investments amid record demand for office spaces across the top seven cities.

Bengaluru-based WeWork India Management Ltd, which filed its Draft Red Herring Prospectus (DRHP) in February, obtained observations from the markets regulator on July 8, an update with the SEBI showed on Tuesday.

Established in 2017, WeWork India is promoted by Bengaluru-based real estate company Embassy Group. It has the exclusive license of the 'WeWork' brand in India.

During the 2023-24 fiscal, WeWork India posted a net loss of Rs 135.83 crore over a total income of Rs 1,737.16 crore. The company, however, posted a profit of Rs 174.13 crore in the first six months of the 2024-25 fiscal.

Total income stood at Rs 960.76 crore during the April-September period of the 2024-25 financial year.

In WeWork India, Embassy Group has around 76.21 per cent stake while WeWork Global owns 23.45 per cent.

As per the DRHP, the proposed IPO is entirely an Offer for Sale (OFS) of up to 4.37 crore equity shares. Promoter group firm Embassy Buildcon LLP and investor 1 Ariel Way Tenant Ltd (part of WeWork Global) will offload shares.

Through the OFS, Embassy Buildcon LLP will sell up to 33,458,659 equity shares, while 1 Ariel Way Tenant Ltd up to 10,295,293 shares.

Since it is an OFS, WeWork India will not receive any proceeds from the IPO.

On Monday, Smartworks Coworking Spaces Ltd's Rs 583 crore IPO was subscribed 13.45 times. Awfis and EFC (I) Ltd are already listed on the stock exchanges.

Co-working operators are tapping capital markets to raise funds for expansion amid rising demand for both conventional and flexible managed workspaces.

In its draft papers, WeWork India stated that the object of the offer is to achieve the benefits of listing the equity shares on the stock exchanges.

"Our company expects that listing of the equity shares will enhance our visibility and brand and provide liquidity to its existing shareholders. The listing will also provide a public market for the equity shares in India," WeWork India had said in the DRHP.

WeWork Global had in June 2021 invested USD 100 million in WeWork India. In January this year, the company raised Rs 500 crore through a rights issue, mainly to reduce debt and achieve further growth.

WeWork India provides flexible, high-quality workspaces to customers, which include companies of all sizes as well as individuals. It primarily leases Grade A office space from leading developers across Tier 1 cities and designs, builds, and operates them as flexible workspaces.

Its portfolio comprises 77 lakh square feet of area, of which 70 lakh square feet is already operational. The operational desk capacity has reached 1.03 lakh.

The company has a presence in Bengaluru, Mumbai, Pune, Hyderabad, Gurugram, Noida, Delhi, and Chennai. It has more than 500 employees.