Is Smartworks Coworking Spaces IPO Good or Bad – Detailed Review

Smartworks Coworking Spaces Limited IPO is kicking off its initial public offering, which will be open from July 10, 2025, to July 14, 2025. While considering applying for this IPO, certain questions may arise in your mind, including whether the Smartworks Coworking Spaces IPO is good or bad, whether it is worth investing in this IPO, and so on. 

This article offers a comprehensive Smartworks Coworking Spaces IPO review, covering its business operations and fundamental analysis to help you make an informed investment choice.

Smartworks Coworking Spaces IPO Review

Smartworks Coworking Spaces is gearing up for its Initial Public Offering (IPO), aiming to raise Rs 582.56 crore. The net proceeds from the Fresh Issue will be used for partial or full repayment of borrowings, capital investment in fit-outs and security deposits for upcoming centers, and general corporate purposes. Proceeds from the Offer for Sale will be received by the selling shareholders.

The company has shown strong revenue growth, which is primarily driven by lease rentals. And the EBITDA has more than doubled from FY23 to FY25, with healthy margins around 59–63%, indicating efficient cost control. RoCE has also improved sharply, rising from 11.90% to 42.30%, showcasing better capital utilization. 

However, high depreciation and amortization expenses from unrented leased properties, which amount to Rs 635.99 crore in FY25, have significantly impacted profitability, leading to continued net losses over the past three years, with FY25 losses at Rs 63.18 crore. 

Next, when we compare Smartworks with its peers, the company surpasses Awfis in scale, with higher revenue from operations, but it lags in profitability. The company also reported a negative EPS and RoNW, indicating ongoing losses and erosion of net worth. 

That said, potential investors are strongly advised to conduct their own independent analysis and consult financial advisors before making any investment decision. Keep reading to find out more about the company’s background, business model, and growth strategies. 

Company Overview of Smartworks Coworking Spaces IPO

The Smartworks Coworking Spaces operates as a comprehensive office experience and managed campus platform, catering primarily to mid-to-large-sized enterprises in India. By transforming traditional bare-shell properties into fully serviced, technology-enabled workspaces under the ‘Smartworks’ brand, the company enhances workplace productivity for both Indian corporations and multinational corporations. These campuses are designed to offer more than just office space as they integrate modern aesthetics, intelligent layouts, and a wide range of amenities that support employee well-being and collaboration.

Their managed campus portfolio spans 50 centers across 15 cities, including key metros such as Bengaluru, Pune, Hyderabad, Gurugram, Mumbai, Noida, and Chennai. These campuses collectively offer a total capacity of 203,118 seats. The campuses are designed using the company’s proprietary design library and incorporate features such as cafeterias, gyms, crèches, convenience stores, medical centers, and sports zones. 

By March 31, 2025, they had leased and managed a total Super Built-up Area (SBA) of 8.99 million square feet, and the company’s operational centers served 738 clients with 152,619 occupied seats. As of June 30, 2025, they served 728 clients with 169,541 seats, including 12,044 seats yet to be occupied by clients at operational centers. Additionally, their international footprint includes two leased centers in Singapore with a combined SBA of 35,036 square feet, catering to 83 clients as of June 30, 2025.

Among their largest centers are four lease-signed properties in India with individual SBAs above 0.5 million square feet. The flagship center is located in Vaishnavi Tech Park, Bengaluru, spanning approximately 0.7 million square feet. This surpassed earlier large campuses such as M-Agile (0.69 million square feet) and AP-81 (0.55 million square feet), both located in Pune. The average center size across their portfolio stands at 0.18 million square feet as of March 31, 2025. 

Industry Overview of Smartworks Coworking Spaces IPO 

As of March 31, 2025, India’s commercial office stock is estimated at approximately 883 million square feet. This segment is projected to expand at a compound annual growth rate (CAGR) of 6.7%, reaching around 1,072 million square feet by the end of 2027.

Within this broader commercial real estate landscape, flexible workspace solutions are emerging as a key component of modern workplace strategies. These solutions support evolving work preferences and introduce much-needed adaptability into traditional office environments. By the end of the calendar year 2024, the total flexible workspace stock in India is expected to range between 82 and 86 million square feet. This figure is projected to rise significantly, reaching around 140 to 144 million square feet across Tier 1 cities by the end of 2027, representing a robust CAGR of approximately 18–20%.

The potential for flexible workspace operators remains substantial. By 2027, the total addressable market (TAM) is estimated to span 280 to 300 million square feet in area, with a market value between Rs 73,000 crore and Rs 96,000 crore.

Financial Overview of Smartworks Coworking Spaces IPO

When examining the company's revenue from operations, we observe a steady upward trend. Most of this revenue is generated from lease rentals. Additionally, the company earns income from other revenue sources, including ancillary services, design and fit-out services, and software fees.

Speaking about the EBITDA, it has increased from Rs 423.99 crore in FY23 to Rs 857.26 crore in FY25, more than doubling in two years. EBITDA margins are seen to hover around 59% - 63%, despite increased operating expenses, which indicates effective cost management. Now, looking at the return metrics, we understand the RoCE has improved significantly from 11.90% in FY23 to 42.30% in FY25, reflecting better utilisation of capital.

However, the company has acquired the properties on lease, which are yet to be rented out to the clients. Due to this, the company is incurring Rs 635.99 crore under depreciation and amortization expenses, which is eating away the company’s margins. After all the interest and tax settlements, the company has been ending up in losses for the past 3 years. And as of FY25, the losses stand at 63.18%. 

Strengths and Risks of Smartworks Coworking Spaces IPO

Let’s dive into the strengths and weaknesses to assess if the Smartworks Coworking Spaces IPO is good or bad for investors.

Strengths 

• Market leadership:
  With a lease-signed portfolio of 8.99 million sq. ft. across 50 centers in 15 cities, the company stands as India’s largest managed campus operator. Backed by a strong CAGR of 20.80% in space, its pan-India presence, scale, and early-mover advantage continue to drive steady growth and market dominance.

• Large-campus expertise:
  The company specializes in leasing and transforming large, bare-shell properties in key Tier 1 city clusters into fully serviced, amenity-rich ‘Smartworks’ campuses. With a presence in 19 of 28 strategic clusters and four centers above 0.5 million sq. ft., they offer integrated facility management.

• Enterprise focus:
  The company targets mid-to-large enterprises with seat requirements typically exceeding 300, offering customized workspace solutions across Tier 1 and Tier 2 cities. Long-term contracts, multi-city presence, and partnerships across diverse sectors like IT, fintech, and consulting drive revenue stability and scalable growth.

• Efficient execution:
  Through standardized designs, modular fit-outs, and proprietary technology, the company delivers cost-effective, high-quality workspaces with faster turnaround times. Lower capital and operating costs, combined with tools like BuildX and smart building systems, drive operational efficiency and enhance client experience at scale.

• Capital efficiency:
  The company maintains a capital-light model with a payback period for Mature Centres is  30–32 months, significantly shorter than industry norms. By leveraging customer deposits, rental discounting, and a phased build-out approach, it minimizes upfront capital needs and optimizes working capital usage.

• Risk resilience:
  The company’s risk-mitigated model ensures financial stability through long-term client contracts, diversified tenant mix, and lease rental income that exceeds landlord obligations. Its cautious client concentration cap and multi-sector presence further shield it from sectoral or cyclical disruptions.

Risks

• Geographic concentration risk:
  With over 75% of rental revenue in FY25 derived from Pune, Bengaluru, Hyderabad, and Mumbai, any adverse developments in these key cities could impact occupancy, revenue, and overall financial performance.

• Client concentration risk:
  Relying heavily on large enterprise clients with 300+ seat requirements limits negotiation power and poses revenue risks, as losing such clients or failing to secure similar replacements could impact business performance and cash flows.

• Client acquisition risk:
  Long-term fixed-cost lease agreements expose the company to financial strain if client occupancy drops, as it must continue paying escalating rentals regardless of revenue, potentially impacting cash flows and profitability.

• Broker dependency risk:
  Increased reliance on property consultants and brokers for client acquisition may impact profitability, dilute brand differentiation, and expose the business to unfavourable terms, especially if competitors secure better deals or gain prioritisation.

• Segment challenges:
  The flexible workspace industry faces inherent risks like market saturation, economic volatility, client churn, supply constraints, and rental pressures, any of which could affect business stability, cash flows, and growth potential if not effectively mitigated.

• Leverage risk:
  The company’s high debt-equity ratio may limit its borrowing capacity, raise credit default risk, and hinder its ability to sustain growth or secure funding on favorable terms.

• Variable rental risk:
  Being one of the strategies of the company, the variable rental model is not so efficient yet, as only 33,504 sq. ft. of 4,50,000 sq. ft. under Gurugram Centre has been operational. So, if the company fails to acquire clients to fill up the remaining space, then it will affect the financials of company. 

Strategies of Smartworks Coworking Spaces IPO

• Growth strategy:
  Leveraging its market leadership and rising demand for flexible, amenity-rich workspaces, the company aims to scale its portfolio across key Indian cities while deepening multi-city partnerships with enterprise clients.

• Asset-light expansion:
  As of FY25, the company managed 8.99 million square feet, primarily acquired through a straight lease model. To enhance capital efficiency and reduce occupancy-related risks, the company is now strategically shifting towards variable rental and management contract models. As part of this initiative, it acquired 450,000 square feet in Gurugram under the variable rental model, with 33,504 square feet already operational.

• New revenue streams:
  The company is scaling high-margin verticals like value-added services and Fit-out-as-a-Service, leveraging its large client base, design expertise, and service partnerships to drive cross-selling and unlock new growth opportunities.

• Tech-driven innovation:
  The company continues to develop proprietary, AI-enabled, and IoT-integrated tech solutions to enhance operational efficiency, improve client experience, and unlock monetisation through SaaS offerings and property technology deployment beyond its own campuses.

• Sustainability focus:
  The company is advancing its ESG agenda through clean energy adoption, water and waste reduction, and smart resource tracking while supporting clients’ green goals and driving long-term community impact.

Smartworks Coworking Spaces IPO Vs Peers

Source: RHP of the company

In terms of scale, we see that Smartworks is ahead of Awfis, as their revenue from operations stands at Rs 1,374.06 crore and 1,207.54 crore, respectively. 

But when we observe the Earnings Per Share of Smartworks, the company posted a negative EPS, while Awfis generated a positive EPS of Rs 9.75, reflecting profitability. This shows that although Smartworks is ahead in revenue, it has not yet achieved net profitability, unlike Awfis. 

Looking into the Return on Net Worth, Smartworks' negative RoNW shows a deterioration of net worth due to sustained losses, whereas Awfis' positive RoNW signals efficient capital utilisation and profitability.

Objectives of Smartworks Coworking Spaces IPO 

As far as the Fresh Issue is concerned, the net proceeds of this issue will be used to: 

• Repay, prepay, or redeem, fully or partly, the borrowing taken from the company; 

• Capital investment for fit-outs and security deposits at upcoming centers;

• General corporate expenses.

As far as the Offer for Sale is concerned, the Selling Shareholders shall be entitled to receive the proceeds of the Offer for Sale. 

Smartworks Coworking Spaces IPO Details

IPO Dates

Smartworks Coworking Spaces IPO will be open for subscription from July 10, 2025, to July 14, 2025. The allotment of shares to investors will take place on July 15, 2025, and the company will be listed on the NSE and BSE on July 17, 2025.

IPO Issue Price

Smartworks Coworking Spaces is offering its shares in the price band of Rs 387 to Rs 407 per share. This means you would require an investment of Rs. 14,652 per lot (36 shares) if you are bidding for the IPO at the upper price band.

IPO Size

Smartworks Coworking Spaces is issuing a total of 1,43,13,400 shares, which are worth Rs 582.56 crores, where 1,09,33,660 shares are through the fresh issue and the remaining 33,79,740 shares are through offer for sale. 

IPO Allotment Status

Investors who applied for the IPO can check their IPO allotment status on July 15, 2025, through the registrar's website: MUFG Intime India Private Limited, BSE, NSE, or their stockbroker platform.

IPO Listing Date

The shares of Smartworks Coworking Spaces will be listed on the NSE and BSE on July 17, 2025.

IPO Application Link

Open demat account with Rupeezy today and enjoy a seamless experience when applying for the IPO. With an easy-to-use platform, Rupeezy makes the IPO application process quick and hassle-free.

Apply for Smartworks Coworking Spaces IPO