Co-working space provider WeWork India files draft papers with SEBI to launch IPO

WeWork India, a flexible workspace operator backed by real estate developer Embassy Buildcon, has filed draft papers with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). 

The IPO is planned as an offer-for-sale, meaning no fresh funds will flow into the company, and existing stakeholders will sell part of their shareholding.

Offer-for-Sale structure

Under the draft red herring prospectus, WeWork India aims to offer about 4.37 crore equity shares, all through a pure offer-for-sale. Promoter Embassy Buildcon LLP plans to sell up to 3.34 crore shares, while investor 1 Ariel Way Tenant Ltd. intends to offload up to 1.02 crore shares. 

Embassy Buildcon currently holds a 73.8% stake, while 1 Ariel Way Tenant holds 22.7% on a fully diluted basis. According to the filings, Embassy Buildcon acquired its shares at an average cost of ₹161.83 per share, and 1 Ariel’s average cost was ₹65.88 per share.

JM Financial, ICICI Securities, Jefferies India, Kotak Mahindra Capital and 360 ONE WAM are the lead managers for the proposed public issue, and MUFG Intime India is the registrar.

Financial performance

WeWork India reported a net profit of Rs 174.13 crore in the September quarter of the 2024-25 financial year. In contrast, it recorded a net loss of Rs 135.83 crore for the full year 2023-24, down from a loss of Rs 145.86 crore in 2022-23 and Rs 642.99 crore in 2021-22. 

The company’s total income was Rs 960.76 crore during the second quarter of 2024-25, while its net worth stood at a negative Rs 259.88 crore.

Market presence and clients

Launched in 2017 by its then-Adam Neumann-led parent, WeWork India began through a partnership with Embassy Group’s CEO, Karan Virwani. As of Sept. 30, 2024, WeWork India operated 59 centres with a total of 94,440 desks across eight Indian cities.

Its tenant list includes major players such as Amazon Web Services, JP Morgan Services, Deutsche Telekom and Grant Thornton Bharat.

In June 2024, India’s competition regulator approved WeWork Inc.’s exit from the Indian entity through a sale to Real Trustee Advisory Company.

This two-step process cleared the way for a change in WeWork India’s ownership structure. Once listed, WeWork India will go head-to-head with its only publicly traded competitor, Awfis Space Solutions Ltd.

WeWork India focuses on offering Grade A office spaces on flexible terms to companies of all sizes, including startups. By listing on Indian bourses, it aims to expand its profile and provide an exit opportunity for some of its investors.