Smartworks Coworking Spaces IPO: Issue booked 13x so far; GMP falls further

The initial public offering (IPO) of Smartworks Coworking Spaces saw a decent interest from the investors during the third and final day of the bidding process. The issue was overall subscribed nearly half on day one and had ended second day of bidding with nearly 1.2 times of subscription.

Smartworks Coworking Spaces has launched its initial public offering (IPO), which opened on July 14 and closes today. The IPO is priced in the range of Rs 387 to Rs 407 per share, with a lot size of 36 shares. The company aims to raise Rs 586.52 crore, comprising a fresh issue of Rs 445 crore and an offer-for-sale of up to 33.8 lakh equity shares.

According to the data, the investors made bids for 13,03,33,500 equity shares, or 12.53 times, compared to the 1,04,01,828 equity shares offered for the subscription by 3.35 pm on Monday, July 14, 2025. The three-day bidding for the issue, which kicked off on Thursday, July 10, shall conclude today.

The allocation for qualified institutional bidders (QIBs) was subscribed 23.25 times, while the portion reserved for non-institutional investors (NIIs) saw a subscription of 21.31 times. Allocation of employees was booked 2.16 times. However, the quota set aside for retail investors was booked 2.97 times.

The IPO's reservation details allocate 50% of the shares to qualified institutional buyers (QIBs), 15% to non-institutional investors (NIIs), and 35% to retail investors. Additionally, the company has earmarked shares worth Rs 3.75 crore for its employees, offering a Rs 37 discount per share. Smartworks has also secured Rs 173.64 crore from anchor investors by allocating 42,66,378 shares at Rs 407 each.

Despite the loss-making status, analysts recommend subscribing to the IPO, citing the growing demand for remote and co-working office spaces. However, they also caution about the company's high debt and negative cash flows as major concerns going forward.

Smartworks IPO is priced at 5.8 times TTM EV/Ebitda compared to 14.4x of its domestic listed peer and industry avg. of 6.8 times TTM EV/EBITDA of global listed peers. Moreover, the issue is priced at 20.4 times FY25 EV/adjusted cash Ebitda compared to 49.9 times FY25 EV/adjust cash Ebitda of its domestic listed peer, said KR Choksey with a 'subscribe' rating, finding it to be attractively priced.

Smartworks Coworking Spaces, incorporated in 2015 in New Delhi, provides customised managed workspace solutions. It offers tech-enabled, fully serviced office environments tailored to enterprise needs. Despite the market volatility, the grey market premium (GMP) suggests a premium of Rs 15 per share, indicating potential listing gains of 3-4% for investors.

"Smartworks aims to strategically expand into the variable rental and management contract models as well and intends to deploy cross-selling as the company scale existing ancillary lines and build new ones. Investors looking for long-term opportunities may consider investing in the IPO," said Master Capital Services.

The company's financial performance shows a net loss of Rs 63.18 crore on revenue of Rs 1,409.67 crore for the year ending March 31, 2025. This follows a profitable 2023-24 fiscal year, which saw a net profit of Rs 49.96 crore on revenue of Rs 1,113.11 crore. Smartworks' market capitalisation stands at Rs 4,644.82 crore.

Key dates to note include the IPO closing on July 14, the listing of shares on July 17, and the basis of allotment announcement. The initiation of refunds and credit of shares to demat accounts will follow the listing.

Investors can expect shares to be listed on the BSE and NSE on July 17. Lead managers include JM Financial, IIFL Capital Services, BoB Capital Markets, and Kotak Mahindra Capital Company, with MUFG Intime India as the registrar.