Everything You Need to Know About Smartworks Coworking Spaces Ltd IPO

Smartworks Coworking Spaces Ltd: The Company

Founded in 2015, Smartworks has rapidly grown to become India's largest managed office space provider by leased area. They specialize in leasing large, bare-shell properties in prime locations and transforming them into fully serviced, tech-enabled campuses with a host of modern amenities. Think more than just desks – they offer cafeterias, sports zones, gyms, medical centers, and integrated technology solutions, creating a dynamic work environment.

Their primary clientele consists of mid-to-large sized enterprises across various sectors like IT, BFSI, and startups, seeking flexible, customized workspace solutions. With a footprint spanning over 8.99 million sq. ft. across 50 centers in 15 cities (and two centers in Singapore), Smartworks has positioned itself as a leader in a market increasingly moving towards flexible and managed office spaces.

The company's business model emphasizes providing value-centric pricing and a superior office experience compared to traditional workspaces, while also benefiting landlords by transforming their properties into branded, managed campuses.

IPO Details: What Investors Need to Know

The Smartworks Coworking Spaces IPO is a book-built issue with a total size of approximately ₹583 crores. It comprises a fresh issue of ₹445 crores and an Offer for Sale (OFS) of 33.79 lakh equity shares by existing shareholders.

Here's a breakdown of the crucial dates and figures:

• IPO Open Date: July 10, 2025

• IPO Close Date: July 14, 2025 (Today!)

• Face Value: ₹10 per share

• Price Band: ₹387 – ₹407 per share

• Employee Discount: ₹37 per share

• Minimum Lot Size: 36 shares

• Minimum Retail Investment: ₹14,652 (at the upper price band)

• Allotment Finalization: Expected July 15, 2025

• Refund Initiation: Expected July 16, 2025

• Demat Account Credit: Expected July 16, 2025

• Listing Date (BSE & NSE): Tentatively July 17, 2025

The net proceeds from the fresh issue are intended for:

• Capital expenditure related to fit-outs in new centers and security deposits for these centers (approximately ₹225.8 crore).

• Repayment or pre-payment of certain outstanding borrowings (approximately ₹114 crore).

• General corporate purposes.

Financial Performance: A Snapshot

Smartworks coworking Spaces has demonstrated robust top-line growth. Their operating revenue increased significantly from ₹711.39 crore in FY23 to ₹1,374.05 crore in FY25, reflecting a Compound Annual Growth Rate (CAGR) of 38.9%. EBITDA has more than doubled in the same period.

However, it's important to note that the company has been loss-making at the net profit level. They reported a net loss of ₹63.17 crore in FY25, following losses of ₹49.96 crore in FY24 and ₹101.05 crore in FY23. Despite this, they maintain healthy EBITDA margins, indicating operational efficiency. The company's business model is largely asset-light, relying on long-term leases rather than outright ownership.

Subscription Status (As of July 14, 2025 - Day 5 End)

As of the close of bidding on Day 5 (July 14, 2025), the Smartworks Coworking Spaces IPO has garnered a decent response:

• Overall Subscription: The issue has been subscribed approximately 1.2 to 1.4 times (figures may vary slightly across sources, but indicate a subscribed status).

• Retail Individual Investors (RIIs): Retail investors have shown keen interest, subscribing their portion over 3 times (around 3.17x).

• Non-Institutional Investors (NIIs): NIIs have also subscribed their allocated portion well, exceeding 1.8 times(around 1.86x).

• Qualified Institutional Buyers (QIBs): QIBs have shown a more measured interest, with their portion subscribed around 0.73 to 0.77 times (around 0.77x as per some reports).

Grey Market Premium (GMP)

The Grey Market Premium (GMP) provides an early, unofficial indication of market sentiment and potential listing performance. As of July 14, 2025, the GMP for Smartworks Coworking Spaces IPO is reported to be in the range of ₹30 to ₹33 per share.

Considering the upper end of the IPO price band (₹407) and a GMP of ₹32, the estimated listing price would be around ₹439. This suggests a potential listing gain of approximately 7.8% to 8%. While this indicates a positive sentiment, remember that GMP is a volatile, unofficial indicator and should not be the sole basis for investment decisions.

Investment Recommendation

Smartworks Coworking Spaces operates in a high-growth segment driven by the increasing demand for flexible and managed office solutions. Their extensive footprint, focus on large enterprise clients, and capital-efficient model are significant strengths. The company's strong revenue growth and healthy EBITDA margins underscore its operational capabilities.

However, investors must carefully weigh the following:

• Consistent Losses: Despite strong revenue, the company has consistently reported net losses. While their asset-light model may defer profitability, sustained losses are a key concern for long-term investors.

• Valuation: Some analyses suggest that the valuation, based on metrics like Price-to-Book Value, appears stretched, especially given the loss-making status.

• Competition: The flexible workspace market is becoming increasingly competitive with both organized players (like Awfis) and traditional real estate companies entering the segment.

• Concentration Risk: A significant portion of their revenue is derived from centers in a few major cities, making them susceptible to adverse developments in those locations.

Our Recommendation:

For investors with a high-risk appetite and a long-term investment horizon who believe in the structural shift towards flexible workspaces, a "Subscribe with Caution" approach is advised for the Smartworks Coworking Spaces IPO. The company's market leadership and growth potential in a burgeoning sector are undeniable.

For conservative investors or those primarily seeking immediate listing gains, it might be prudent to "Observe" the post-listing performance and the company's trajectory towards profitability before committing capital. The fact that the QIB portion was not fully subscribed on the final day suggests that institutional investors are also exercising a degree of caution.

Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Investors are strongly advised to conduct thorough due diligence, understand all associated risks, and consult with a SEBI-registered financial advisor before making any investment decisions. The Grey Market Premium (GMP) is an unofficial indicator and inherently volatile. Investing in IPOs carries risks, and there is no guarantee of returns or listing gains.