With tier-2 and tier-3 cities emerging as significant growth hubs, the coworking industry in India is witnessing a massive transformation. Government support, upcoming IPOs, and a growing preference for flexible workspaces fuel the rapid expansion. Industry leaders believe that the next few years will shape the future of coworking in the country.

Government Push: Andhra Pradesh Leads the Way

To boost employment and entrepreneurship, Andhra Pradesh Chief Minister N. Chandrababu Naidu directed officials to develop coworking and “neighbourhood working spaces.” The state aims to create 1,50,000 coworking seats in government and private buildings by 2025.

While the government is pushing for expansion, private players are also aggressively investing in new locations, particularly non-metro cities.

Tier-2 and Tier-3 Cities: The Next Big Market

Industry leaders foresee the next phase of growth coming from smaller cities. Umesh U, Co-founder and Managing Director of DevX, a prominent workspace provider, emphasized this shift, stating, “Demand in tier-2 and tier-3 cities will drive the next growth spurt in this industry.”

Amit Ramani, Chairman and Managing Director of Awfis Space Solutions, echoed similar sentiments. Since September 2023, Awfis has expanded its presence in tier-2 cities by 43%, increasing from 14 to 20 centres.

Multiple factors—including hybrid work models, a growing emphasis on health and wellness, and increased collaboration—drive demand for flexible workspaces beyond metro areas. A joint report by Qdesq and MyBranch revealed that between 2020 and 2024, flexible workspaces in non-metro cities recorded 4x growth, accounting for 25% of the entire market by the end of 2024.

IPO Frenzy: Coworking Firms Go Public

The coworking sector is witnessing a wave of IPO filings, signalling strong investor interest. Umesh U of DevX shared, “2025-26 will be a standout year for the industry as 8-10 large companies in this space will be getting listed on the stock exchange.” He estimated that these public offerings could bring a capital infusion of Rs 12,000-15,000 crore.

Some of the most significant IPO moves in recent months include:

• IndiQube Spaces, backed by WestBridge Capital, filed a Draft Red Herring Prospectus (DRHP) with SEBI for an Rs 850 crore IPO.
• Awfis Space Solutions was successfully listed in May 2024, raising Rs 598.93 crore.
• Smartworks Coworking Spaces filed its DRHP for a Rs 550 crore IPO.
• DevX announced plans to list with a 2.47 crore equity share issue, targeting Rs 125 crore.
• WeWork India, a joint venture of Embassy Group and WeWork, filed its papers for an IPO with an offer for sale of 4.37 crore equity shares.
• BHIVE Workspace is also preparing for a 2026 IPO, while Table Space, backed by Hillhouse Capital, aims to go public in 2025.

Industry Growth and Market Potential

The numbers confirm the coworking sector’s rapid growth. According to Avendus Capital, the flexible office space industry, valued at $3.5 billion in 2023, is projected to reach $9 billion by 2028.

Post-pandemic trends have played a crucial role in this surge. A CBRE report noted that between January and March 2024, flex workspaces accounted for 22% of India’s total gross office leasing space of 144 lakh sq ft—up 7% from the same period in 2023.

Awfis, which recently went public, saw its IPO oversubscribed by 108.56 times and reported a 40% revenue jump in Q2 FY 24-25, reaching Rs 292 crore.

Expanding Services and New Revenue Streams

Coworking firms are diversifying their offerings to attract a broader customer base. Sameer Singh, COO of 91Springboard, highlighted the industry’s broad reach: “Our customer base includes freelancers, startups, SMEs, large enterprises, and MNCs.”

To stay competitive, flexible space providers integrate multi-genre services, offering private offices, shared desks, event spaces, and more. This diversification helps them unlock new revenue streams while catering to evolving work culture trends.

The Future: Hotelisation and GCC Expansion

Another significant trend reshaping the industry is the “hotelisation” of coworking spaces. Inspired by the hospitality sector, providers tailor experiences to customer segments through tiered memberships, tech-driven operations, and sustainable designs.

Coworking firms are well-positioned to capitalise on India’s growing Global Capability Centers (GCC) market. According to NASSCOM, the GCC sector will expand at a 7-8% CAGR, reaching over 4,300-4,400 centres by 2030.

Ramani of Awfis stated, “The next big development would be integrating technology and sustainability into our spaces.” Industry leaders believe that coworking will continue evolving into more innovative, more efficient work environments.

Conclusion: A Bright Future for India’s Coworking Industry

The coworking sector in India is at a pivotal moment. The industry is set for long-term growth, with tier-2 and tier-3 cities driving demand, an influx of IPOs, and increasing diversification. As hybrid work culture solidifies and new business models emerge, coworking firms are poised to reshape India’s office space landscape in the future.