Smartworks Coworking Spaces reported a ₹50 crore loss for FY 2023-24 despite a 50% reduction from the previous year. As it prepares for an IPO, the company plans to use the funds for expansion and debt repayment, aiming to achieve profitability amid India’s recovering coworking market.
Smartworks Coworking Spaces Ltd, a prominent managed office space provider, has reported a consolidated net loss of nearly ₹50 crore for the fiscal year 2023-24. This comes as the company prepares for its Initial Public Offering (IPO) after filing a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). Despite the loss, Smartworks saw a significant increase in total income, rising to ₹1,113.11 crore from ₹744 crore in the previous fiscal year.
Though substantial, the ₹50 crore loss marks a 50% reduction from the ₹101 crore loss reported in the preceding financial year. Smartworks attributes the losses to higher expenses, though the company emphasised its positive EBITDA. “We have achieved a positive EBITDA but have generated a net loss in the last three fiscals,” the company stated in the DRHP.
The IPO is expected to raise significant funds, with a fresh issue of equity shares worth ₹550 crore and an Offer-For-Sale (OFS) of 67.59 lakh shares by promoters. The proceeds will be used primarily for repaying or prepaying certain borrowings, with ₹140 crore allocated. Additionally, ₹282.3 crores will be used for capital expenditures, including fit-outs in new centres and security deposits.
Smartworks has ambitious expansion plans. 41 coworking centres are currently operational across 13 cities, including Delhi-NCR, Bengaluru, Hyderabad, and Chennai. These centres encompass 7.36 million square feet of office space and over 1.66 lakh desks. The company has an additional 0.79 million square feet of space and 19,427 desks in the pipeline, bringing the total portfolio to 43 centres, 8.15 million square feet, and 1.85 lakh desks.
The company’s strategy focuses on leasing large, bare-shell properties in prime locations, transforming them into fully serviced, tech-enabled campuses with modern amenities. This approach caters to mid-to-large enterprises, particularly those requiring over 300 seats.
Despite its losses, Smartworks is optimistic about the future, aiming to increase revenue and decrease expenses to achieve profitability. “We are aiming to generate and sustain increased revenue levels and decrease proportionate expenses in future periods to achieve profitability,” the company highlighted.
The Indian office market, particularly the coworking segment, has steadily recovered post-COVID-19. Other major players in the coworking space, such as Awfis and Pune-based EFC (I) Ltd, have also moved towards public listings, indicating strong investor interest in the sector.
Smartworks’ IPO is poised to capitalise on this momentum, positioning the company to strengthen its presence in India’s rapidly growing flexible office space market.
