The upcoming Initial Public Offering (IPO) of Smartworks Coworking Spaces Ltd has garnered strong recommendations from brokerage house Anand Rathi, which has issued a ‘Subscribe’ rating citing the company’s robust business model, leadership in the managed workspace segment, healthy occupancy levels, and promising growth outlook.
Smartworks IPO details
Smartworks Coworking Spaces Ltd, India’s largest provider of managed office solutions to enterprises, is launching its IPO in July 2025 to raise around ₹1,500 crore. The IPO will be a combination of fresh issue and Offer For Sale (OFS) components to facilitate growth capital infusion and partial promoter exit.
| IPO particulars | Details |
|---|---|
| Issue size | ₹1,500 crore (approx) |
| Offer structure | Fresh issue + OFS |
| Price band | Yet to be announced |
| IPO opening date | Expected mid-July 2025 |
| IPO closing date | Yet to be announced |
| Purpose of funds | Expansion in Tier I & II cities, debt repayment, general corporate purposes |
Business overview
Smartworks was founded in 2016 by Neetish Sarda and has emerged as India’s leading managed workspace platform catering exclusively to large enterprises, unlike traditional coworking firms focused on freelancers and startups. As of March 2025, the company manages over 8 million sq. ft of office space across 12 cities, with major centres in Bengaluru, Delhi-NCR, Pune, Hyderabad, Chennai, and Mumbai.
Key business highlights
- Occupancy rates: 85-90% across portfolio, indicating high demand
- Clientele: Over 500 large enterprise clients including MNCs in IT, BFSI, consulting, and manufacturing sectors
- Revenue model: Long-term leasing with value-added services like cafeteria, IT infrastructure, security, and facility management
Financial performance
| Particulars (₹ crore) | FY22 | FY23 | FY24 |
|---|---|---|---|
| Revenue | 432 | 690 | 920 |
| EBITDA | 85 | 120 | 160 |
| PAT | -72 | -30 | 15 |
| EBITDA Margin (%) | 19.6 | 17.4 | 17.4 |
The company turned profitable in FY24, driven by expansion in high-demand micro-markets and operational efficiencies.
Anand Rathi recommendation
Anand Rathi recommends subscribing to Smartworks IPO citing the following strengths:
- Sector leadership: Largest managed office space provider in India catering to enterprises
- Resilient demand: Corporates increasingly preferring managed solutions for flexibility and cost savings
- Financial turnaround: PAT positive in FY24, EBITDA growth consistent
- Scalable model: Strong pipeline for expansion to new cities and business parks
However, the brokerage also cautions about potential risks including:
- High lease liabilities on books due to long-term lock-in contracts
- Competitive intensity from players like WeWork India, Awfis, Tablespace
- Economic slowdown impact on corporate workspace demand
Industry overview
The managed office market in India is expected to grow at a CAGR of 12-14% over FY25-30 as companies focus on hybrid models, flexible leasing, and operational cost rationalisation. Smartworks, with its enterprise-exclusive focus, is well-positioned to capture incremental demand.
| Top Managed Workspace Players in India (FY24) | Market Share (% by area) |
|---|---|
| Smartworks | 18 |
| WeWork India | 12 |
| Awfis | 9 |
| Tablespace | 6 |
| Others | 55 |
Growth strategy post-IPO
- Geographic expansion: New centres planned in Tier II cities like Coimbatore, Jaipur, Bhubaneswar
- Technology integration: Digital platforms for client management and facility operations
- Service diversification: Integrated facility management, event spaces, and incubation support
Grey market premium
As per market dealers, Smartworks unlisted shares are trading at a premium of ₹40-50 per share, indicating positive sentiment for potential listing gains. Final GMP trends will depend on the announced price band and subscription response from anchor investors and QIBs.
Analyst view
- Motilal Oswal Financial Services: “First-mover advantage in enterprise managed workspaces with improving profitability. Pricing will be key to listing gains.”
- ICICI Securities: “Structural growth story with robust fundamentals, but monitoring lease liability ratios is crucial.”
IPO outlook
Given its sector leadership, differentiated positioning, strong revenue visibility, and clear expansion strategy, Smartworks Coworking Spaces Ltd is expected to attract significant investor interest. Analysts advise investors to consider it for medium to long-term portfolio diversification into the real estate services segment.
Disclaimer
This news content is for informational purposes only. It does not constitute investment advice or a recommendation. Readers are advised to consult their SEBI-registered financial advisor before investing.
