Several coworking companies, including WeWork India, SimplWork Offices, and TableSpace Technologies, are preparing IPOs following Awfis’ successful listing. Investor interest is driven by the coworking sector’s strong growth, asset-light model, and profitability. Private equity investments and acquisitions are accelerating the industry’s transformation into managed office spaces for large corporations.
The coworking industry is gearing up for a wave of Initial Public Offerings (IPOs) as demand for flexible workspaces surges post-pandemic. Following the successful IPO of Awfis Space Solutions earlier this year, several other players in the sector, including WeWork India, SimplWork Offices, and TableSpace Technologies, are now preparing to go public, fueled by growing investor interest.
“Currently, talks are on with investment bankers, and appointments will be made soon,” said an anonymous investment banker, highlighting that the expected IPOs could range between ₹600 crore and ₹1,500 crore. This comes after Awfis raised ₹599 crore in its listing, which has since seen its stock double in value on the National Stock Exchange, closing at ₹792.50 earlier this week. This bullish performance has acted as a catalyst, encouraging other coworking firms to follow suit.
Smartworks, another major player, has already filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) and is aiming for a ₹550 crore IPO. According to Prashant Rao, Director and Head of Equity Capital Markets at Anand Rathi Investment Banking, “Interest in this sector remains strong even on the unlisted side,” citing WeWork India’s ₹1,200 crore equity investment in June 2023 as a sign of the sector’s strong appeal to investors.
Private equity firms have shown a keen interest in the coworking space, drawn by its asset-light model, strong EBITDA margins of over 15%, and scalability. Major coworking brands, including TableSpace, Indiqube, and WeWork, have attracted significant private equity investments. Additionally, acquisitions in the sector have gained traction, with notable deals like myHQ’s acquisition by Anarock and Oyo’s purchase of Innov8.
Vijay Agrawal, Managing Director of Equirus, noted that coworking companies are increasing, with year-on-year growth ranging from 50% to 100%. He also emphasised the sector’s evolution from offering coworking spaces to managing office campuses for large corporations. “Awfis’ successful IPO and Smartworks’ filing have paved the way for other firms like Red Bricks and BHIVE to plan their IPOs in the next 12 to 18 months,” Agrawal added.
The coworking industry’s resilience and adaptability have made it a prime candidate for capital markets. As more companies seek IPOs, the sector’s transformation into a scalable and profitable business model will likely continue attracting investor interest.
