Bengaluru-headquartered coworking space provider BHIVE Workspace is poised to launch its initial public offering (IPO) within the next two years. The company’s founder and chief executive, Shesh Rao Paplikar, revealed that preparations will begin once BHIVE achieves the ₹500 crore revenue milestone. This strategic move aligns with the company’s vision to establish itself as a leading player in the coworking industry by leveraging the financial markets for further expansion.

IPO Timeline and Revenue Targets

Paplikar announced that BHIVE Workspace is targeting a 2026 IPO timeline. The company focuses on expanding its revenue, a prerequisite for moving forward with the IPO plans. “We are confident in our ability to expand across multiple cities. Revenue is our primary target, and we are PAT positive,” Paplikar stated. Achieving the ₹500 crore revenue mark is crucial for the company, as it signals financial stability and growth potential to potential investors. This milestone will also enable BHIVE to attract more capital, fueling its expansion plans.

Fundraising and Expansion Strategies

Discussing BHIVE’s fundraising strategies, Paplikar mentioned that financial capital negotiation cycles are lengthier thanance its property expansion rather than seeking equity investors. This approach allows BHIVE to maintain control while scaling its operations. “We believe that family offices provide a more strategic and patient form of capital, which aligns with our long-term growth objectives,” Paplikar explained. By opting for debt financing over equity, BHIVE can avoid dilution of ownership and retain greater control over its business decisions.

Expansion Plans in Mumbai

BHIVE is actively seeking additional space in Mumbai, aiming for an extra 2 lakh sq ft. The company has already shortlisted several properties and is in negotiations with landlords. Paplikar noted that the negotiation cycles in Mumbai are typically longer compared to Bengaluru due to differences in market dynamics.

“Bengaluru landlords move faster as there is ample supply and available land,” he explained. BHIVE typically signs leases for spaces ranging from 50,000 to 1.5 lakh square feet, usually covering 2-3 properties per lease. The company’s focus on Mumbai underscores its strategy to tap into the financial capital’s burgeoning demand for flexible office spaces.

Recent Lease Agreements

Earlier this year, in March, BHIVE signed a significant lease agreement in Adani Inspire, located in the Bandra Kurla Complex. The lease includes three units covering 34,183 square feet at a monthly rent of ₹70 lakh and four units totalling 28,000 square feet at ₹57 lakh per month. Paplikar highlighted the positive response: “We are having very good sign-ups. Almost 65-75% of this space has been booked before launch.”

This pre-booking success reflects the strong demand for BHIVE’s offerings and its ability to attract clients even before the official launch. The Adani Inspire lease is a testament to BHIVE’s strategic planning and execution, ensuring prime locations for its clients.

Expansion Goals for the Financial Year

BHIVE aims to add 1 million square feet to its total footprint in the current financial year. Approximately 7-8 lakh square feet of this will be in Bengaluru, the company’s home base. So far, BHIVE has leased 3 lakh square feet in Bengaluru in the ongoing financial year, adding to a cumulative 1.8 lakh square feet leased last fiscal year. This aggressive expansion plan is driven by the increasing demand for coworking spaces, fueled by the rise of remote work and the need for flexible office solutions.

Paplikar emphasized the importance of maintaining a strong presence in Bengaluru while expanding into other cities. “Our home base in Bengaluru remains a critical market for us, and we are committed to deepening our footprint here while exploring opportunities in other metros,” he said. This dual focus on home and new markets ensures a balanced growth strategy, catering to diverse client needs.

Financial Performance and Future Projections

BHIVE Workspace is targeting over 75% growth in revenue, aiming for ₹300 crore in the financial year 2024-25. In the last fiscal year, the company achieved a total revenue of ₹170 crore and a net profit of ₹7 crore. These figures underscore BHIVE’s robust financial health and growth potential. The company’s focus on profitability and revenue growth highlights its sustainable business model, making it an attractive prospect for investors.

Paplikar attributes this growth to the increasing acceptance of coworking spaces among businesses of all sizes. “Our model is designed to provide flexibility and cost-efficiency, which are crucial for companies navigating the post-pandemic landscape,” he explained. BHIVE’s emphasis on providing high-quality, adaptable workspaces positions it well to capture a significant share of the growing coworking market.

Conclusion

BHIVE Workspace is on a promising trajectory with its plans to launch an IPO within the next two years. By focusing on significant revenue milestones and strategic property expansions, particularly in Mumbai and Bengaluru, BHIVE is well-positioned for substantial growth. The company’s commitment to maintaining positive profitability and engaging with family offices for funding further strengthens its foundation for future success.