Coworking space provider DevX files DRHP with SEBI to raise funds via IPO

Ahmedabad-based coworking space provider DevX, also known as Dev Accelerator Ltd, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).

The company is preparing for an Initial Public Offering (IPO) that consists solely of a fresh issue of 2.47 crore equity shares.

These shares will be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). 

The IPO will not include an offer-for-sale component, meaning only new shares will be issued, and no existing shareholders will sell their stakes.

Pantomath Capital Advisors Pvt. will be the book-running lead manager for the issue, and KFIN Technologies Ltd. will serve as the registrar.

Focused on expansion and debt repayment

DevX plans to use the funds raised from the IPO to fuel its growth, especially in expanding its coworking space business. Specifically, a significant portion of the proceeds, about Rs 68.95 crore, will go toward the capital expenditure for "fit-outs" in its new centres and security deposits for these centres.

Another Rs 30 crore will be used to repay and prepay certain borrowings, including the redemption of non-convertible debentures (NCDs) issued by the company.

It will also allocate funds for general corporate purposes to support its overall business operations and long-term growth strategies.

Financial performance

DevX has demonstrated strong financial growth over the past few years. According to its DRHP, the company turned profitable in the fiscal year 2023-24 (FY24), reporting a profit after tax (PAT) of Rs 43.7 lakh. This is a significant turnaround from the previous fiscal year, where it recorded a loss of Rs 12.8 crore in FY23 and Rs 7.5 crore in FY22.

Revenue from operations for FY24 stood at Rs 108.08 crore, marking a 55% increase compared to Rs 69.91 crore in FY23. The company's consistent growth highlights the increasing demand for coworking spaces, especially as businesses across India continue to adopt flexible office solutions.

DevX’s market presence

DevX, founded in 2017 by Parth Shah, Rushit Shah, and Umesh Uttamchandani, currently operates over 25 centers in more than 10 cities, including Ahmedabad, Vadodara, Bengaluru, Delhi, Kochi, and Surat.

As part of its expansion plan, the company is looking to establish new coworking centers in key cities such as Mumbai, Gurugram, Noida, Pune, Chennai, GIFT City, Ahmedabad, Rajkot, Goa, Surat, and Jaipur over the next three years.

The company serves a wide range of clients, including major names such as Zomato, WhiteOak, Tim Hortons, Hitachi, and Darwinbox. DevX positions itself as a leading provider of coworking and managed office spaces in Gujarat, and its expansion plans aim to strengthen its footprint across India.

In February 2023, DevX raised $7 million through a combination of debt and equity, backed by investors like Kalpesh Harakhchand Gala, Unmaj Corporation, and the Bidiwala Family Office.