Smartworks sets price band for its ₹583cr IPO
What's the story
Smartworks Coworking Spaces Ltd has fixed the price band for its initial public offering (IPO) between ₹387 and ₹407 per share. The company aims to raise around ₹583 crore through the IPO, which will open for subscription from July 10 to July 14. Bidding for anchor investors will be held on July 9.
Size reduction
Company has revised its IPO size downward
Smartworks has revised its IPO size downward. The fresh issue size has been reduced from ₹550 crore to ₹445 crore, while the Offer for Sale (OFS) has been cut to 33.79 lakh shares from 67.59 lakh shares. At the upper end of the price band, Smartworks's IPO size is estimated at ₹583 crore with a market valuation of about ₹4,645 crore.
Fund allocation
How will the company utilize the fresh issue proceeds?
The proceeds from the fresh issue will be used for capital expenditure related to fit-outs and security deposits in new centers. Some ₹226 crore will go toward these expenses, while ₹114 crore will be used to pay off loans. The remaining funds are said to be utilized for general corporate purposes.
Business strategy
Focuses on leasing large, bare-shell properties in prime locations
Smartworks Coworking Spaces Ltd specializes in leasing large, bare-shell properties in prime locations and transforming them into fully serviced, tech-enabled campuses. These campuses come with modern amenities like cafeterias, sports zones, gyms, and medical centers. The company caters to businesses of all sizes but mainly focuses on mid-to-large companies needing over 300 seats.
Growth trajectory
The company's presence and growth numbers
From FY23 to FY25, Smartworks added 2.83 million sq ft of space under management at a compound annual growth rate (CAGR) of 20.80%. The company's pan-India presence, competitive pricing, and ability to lease entire or large properties have made it a preferred partner for mid-to-large enterprises. This is reflected in the 20.80% CAGR in space managed and a whopping 38.98% CAGR in revenue from operations during the same period.
IPO management
IPO details and expected listing date
Half of the issue size has been reserved for qualified institutional buyers, 35% for retail investors, and the remaining 15% for non-institutional investors. JM Financial Ltd, BOB Capital Markets Ltd, IIFL Securities Ltd, and Kotak Mahindra Capital Company Ltd are managing the company's IPO process. The shares are expected to be listed on July 17 on the BSE and NSE.