Awfis Space Solutions IPO sails through on Day 1; retail portion booked about 3.5x

The initial public offering (IPO) of Awfis Space Solutions saw a strong response from the investors during the first few hours of the bidding on day one. The issue, which kicked off for bidding on Wednesday, May 22, sailed through in little more than three hours, thanks to strong bidding from retail and employee investors.

 

Awfis Space Solutions is selling its shares in the price band of Rs 364-383 apiece. Investors can apply for a minimum of 39 shares and its multiples thereafter. The Rs 598.93 crore FPO issue includes a fresh share sale of Rs 128 crore and an offer-for-sale (OFS) of up to 1,22,95,699 equity shares by its promoters and other shareholders.

 

According to the data, the investors made bids for 77,36,976 equity shares, or 90 per cent, compared to the 86,29,670 equity shares offered for the subscription by 13.15 hours IST on Wednesday, May 22. The three-day bidding for the issue will conclude on Monday, May 27.

 

The allocation for retail investors was subscribed 3.48 times, while the portion reserved for non-institutional investors saw a subscription of 93 per cent. Allocation for employees was booked 2.45 times. However, the portion set aside for qualified-institutional bidders (QIBs) was yet to attract any bids, as of the same time.

 

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.

 

The grey market premium (GMP) for Awfis Space Solutions has marched higher as the bidding for the issue begins. The company was commanding a GMP of Rs 150 apiece, suggesting a listing pop of 39-40 per cent to the investors from the upper end of the price band. The premium in the unofficial market stood at Rs 105-110 earlier.

 

Brokerage firms are mostly positive on the issue. They are suggesting to subscribe to the issue citing its strong leadership, growth potential in the market, robust supply and cost efficiency. However, some analysts are concerned over its loss making nature, increasing competition, market fluctuations and issues in retaining clients.

 

Awfis is poised for substantial growth, driven by the growing demand for flexible workspaces in India. Through modern design innovations, technology integration, and expanded facility management services, the company is focused on providing comprehensive and advanced workspace solutions to cater to a wide range of clients, said Arihant Capital Market.

 

"On post post-issue basis, the company trades 9.53 times P/B and 3.23 times P/S on 9MFY24 sales annualized. The industry dynamics seem positive with increasing demand for commercial real estate in Tier-I and Tier-II cities," it added with a 'subscribe for long term' rating in the issue.

 

The company has reserved shares worth Rs 2 crore for its eligible employees, who will get a discount of Rs 36 apiece. Of the net issue, 75 per cent shares are reserved for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent allocations. Remaining 10 per cent shares shall go to the retail investors of the issue.

 

The growth in flexible workspace is influenced by enterprises focusing on flexibility, cost optimization, workforce fluidity, reverse migration, workplace evolution, and a focus on wellness, facilities, and amenities, alongside the rise of start-ups, said StoxBox. "Considering the favourable market dynamics and performance, we maintain a positive outlook on the company," it said with a 'subscribe' tag.

 

Awfis Space Solutions mobilised a little over Rs 268.61 crore from anchor investors as it allotted 70.13 lakh equity shares to 32 funds at Rs 383 apiece. Awfis Space Solutions reported a net loss of 18.94 crore with a revenue of Rs 633.69 crore for the nine months ended on December 31, 2023. Its net loss came in at Rs 46.64 crore with a revenue of Rs 565.79 crore for FY23.

 

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. Shares of the company shall be listed on both BSE and NSE likely on Thursday, May 30.