Smartworks Takes a Step Towards IPO, Transitions to Public Company

Preeti Bali / 7:43 am / July 8, 2024

Smartworks, a leading provider of co-working spaces in India, has taken a significant step towards a potential initial public offering (IPO) by converting itself into a public company. This move signifies the company’s concrete plans for a future stock market listing.

The company’s board of directors formally approved a resolution to change its legal status from private to public. Consequently, its name has been amended from Smartworks Coworking Spaces Private Limited to Smartworks Coworking Spaces Limited.

Fresh Funding Fuels Growth Ambitions

This development follows a successful $20 million funding round for Smartworks, with participation from investors like Keppel and Ananta Capital Ventures Fund I. The fresh capital injection bolsters Smartworks’ financial resources as it prepares for a potential IPO.

Managed Office Solutions Across Major Indian Cities

Smartworks operates in a unique segment of the office space market. The company leases properties from real estate developers and then subleases them to businesses and enterprises as managed office spaces. This model offers companies flexibility and convenience without the burden of long-term leases and infrastructure management.

Expanding Footprint and Market Presence

Currently, Smartworks boasts a presence in 13 Indian cities, including major business hubs like Bengaluru, Kolkata, Delhi NCR, Mumbai, and Pune. As of March 2024, the company manages a portfolio of 41 co-working centers, encompassing a total area of 8 million square feet.

Financial Performance: Growth with Growing Pains

Smartworks has exhibited impressive growth in recent times. The company’s revenue nearly doubled in FY23, reaching Rs 744 crore. However, a characteristic of many fast-growing startups, Smartworks also experienced a rise in losses. They reported a 44% increase in losses for FY23, reaching Rs 101 crore. The company’s financial results for FY24 are yet to be filed.

Following Awfis’ Footsteps in the Public Market?

Smartworks’ move towards an IPO comes after a successful public listing by another major co-working player in India, Awfis. Backed by Peak XV, Awfis became the first Indian co-working startup to enter the stock market. Notably, their IPO received overwhelming investor interest, with applications exceeding the available shares by more than 100 times on the final day of bidding.

Smartworks’ decision to become a public company suggests it might be aiming to replicate Awfis’ success in the public market. Only time will tell if Smartworks can follow a similar path and attract strong investor interest in a potential IPO.

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