Smartworks Coworking Spaces shares are expected to list with moderate gains of 3-5 percent on Thursday, July 17, based on current grey market trends.
The Rs 583-crore initial public offering (IPO) of Smartworks Coworking Spaces received a strong response from investors, with an overall subscription of 13.45 times during the bidding window from July 10 to 14. The shares will debut on both the NSE and BSE. The issue had a price band of Rs 387–407 per share. The company had earlier raised Rs 173.64 crore from anchor investors.
Smartworks, which plans to use the proceeds for business expansion and debt reduction, is India's largest managed campus operator as of March 31, 2024, with 8.99 million sq ft of leased and managed area.
"The company provides fully serviced, tech-enabled office campuses targeted at mid-to-large enterprises, with modern amenities such as cafeterias, gyms, crèches, and medical centres," said Narendra Solanki, Head Fundamental Research – Investment Services, Anand Rathi Shares and Stock Brokers.
He noted that Smartworks has grown its managed space at a compound annual growth rate (CAGR) of 38.37 percent between 2020 and 2024, surpassing the industry average of 23–24 percent. At the upper end of the price band, the company is valued at a price-to-sales (P/S) ratio of 3.3x and EV/EBITDA of 9.7x, with a post-issue market capitalisation of Rs 4,644.8 crore.
"Investors may consider holding the stock with a long-term perspective depending on their risk appetite and return expectations," he added.
Mahesh M Ojha, AVP – Research & Business Development, Hensex Securities, said the IPO appears fairly priced and projected a limited listing gain of 3–5 percent. "Those looking for listing gains may book profit, while long-term investors can continue to hold as the industry outlook remains positive," he said.
Jickson Sajee, Research Analyst at INVasset PMS, said the company posted revenue of Rs 1,374 crore in FY25, up sharply from Rs 711 crore in FY23, supported by demand from IT, BFSI, and GCCs opting for flexible workspaces. EBITDA rose from Rs 36 crore to Rs 172 crore during the same period.
"Despite strong growth, the company remains net loss-making, mainly due to depreciation and finance costs. Its net worth stands at Rs 108 crore, and the post-IPO net debt-to-equity is expected to improve to around 0.5x," he said.
On valuations, Sajee noted that Smartworks is being offered at a market cap of about Rs 4,645 crore, implying a P/S of 3.4x and a price-to-book (P/B) ratio of 8.4x. "While peer Awfis trades at higher multiples on a lower revenue base, its improving margins raise expectations from Smartworks. EFC Ltd operates on a smaller scale and follows an asset-heavy model. Smartworks brings scale and visibility, but future re-rating depends on margin expansion and a clear path to break-even," he added.
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