Awfis Space Solutions IPO: What GMP signals for this Ashish Kacholia-backed issue ahead of listing

Shares of Awfis Space Solutions are to make Dalal Street debut on Thursday, May 30 and the Ashish Kacholia backed company is likely to deliver a decent listing pop to the investors, if one goes by the current grey market premium (GMP). However, the premium in the unofficial market has taken a hit lately.
 

Last heard, Awfis Space Solutions was commanding a premium of Rs 100-105 in the grey market, suggesting a listing pop of 25-27 per cent to the investors on listing over its issue price of Rs 383 apeice. However, the premium in the unofficial market stood at Rs 125-130 about a day earlier.
 

Awfis Space Solutions IPO has received robust oversubscription and we expect a substantial listing of the issue when it debuts on the bourses around Rs 500 per share, said Shreyansh V Shah, Research Analyst at StoxBox, who sees about a 30 per cent listing pop for the investors.
 

"Awfis aims to provide well-suited solutions tailored to meet the needs of its diverse clientele, which spans different demographics, seat cohorts, and industry sectors. Their suite of flexible workspace solutions encompasses its space solutions, Awfis Transform and Awfis Care. We advise investors who have received allotment to hold shares from a long-term perspective," he said.
 

Awfis Space Solutions' IPO ran between May 22 and May 27, which was sold in the price band of Rs 264-383 per share with a lot size of 39 shares. The company raised a total of Rs 598.93 crore through its primary offering, which included a fresh share sale of Rs 128 crore and offer-for-sale (OFS) of up to 1,22,95,699 equity shares.
 

The issue was overall subscribed a stellar 108.56 times. On an individual basis, quota for qualified institutional bidders (QIBs) was booked 116.95 times and the allocation for non-institutional investors was subscribed 129.81 times. The portions reserved for retail investors and employees was subscribed 54.58 times and 25.20 times, respectively during the three-day bidding process.
 

Awfis Space Solutions is a prominent player in India's booming workspace solutions market, is set for a decent listing despite fluctuating grey market premiums. Currently, the GMP is reflecting some investor interest. Notably, the IPO attracted a substantial subscription of 108 times, said Shivani Nyati, Head of Wealth, Swastika Investmart.
 

"However, Awfis' financial situation warrants caution. Despite impressive revenue growth, the company struggles with achieving profitability. Negative cash flow and a highly competitive market pose additional challenges. While the high subscription suggests investor interest in the growing workspace sector, Awfis' financials necessitate a neutral stance," she said suggesting a decent listing.
 

New Delhi-based Awfis Space Solutions, incorporated in December 2014, is a workspace solution provider in India. The company offers a wide range of flexible workspace solutions, catering to the needs of individuals, start-ups, SMEs, and large corporations. It has expanded its business offerings and now provides in-house fit-out and facility management services at its centers.
 

According to the DRHP of the company, Seasoned Dalal Street investor Ashish Kacholia owned 34,65,691 equity shares or 5.18 per cent stake in the company who invested about Rs 50 crore in the company converting his compulsorily convertible preference share shares at Rs 144.27 apiece in April 2024.
 

Brokerage firms were mostly positive on the issue, suggesting to subscribe to it. Axis Capital, IIFL Securities, ICICI Securities and Emkay Global Financial Services are the book running lead managers of the Awfis Space Solutions IPO, while Bigshare Services is the registrar for the issue.