WeWork India IPO subscribed 13% on Day 2, GMP signals muted listing: Should you apply?

The initial public offering of WeWork India Management continued to see subdued investor interest during its second day of public bidding, being subscribed 13 percent on October 6.

The Rs 3,000-crore IPO received bids for more than 34.2 lakh shares, as against the offer size of 2.55 crore shares, according to data on NSE. Employees have fully booked the portion reserved for them, while retail investors have subscribed 37 percent of the portion kept for them.

Non Institutional Investors (NII) have booked 6 percent of their reserved portion, while Qualified Institutional Buyers (QIB) have subscribed 9 percent of the portion kept for them so far.

WeWork India IPO: Key details

WeWork India launched its maiden public issue to raise Rs 3,000 crore entirely through an offer for sale (OFS) of up to 4.63 crore equity shares. This means that all of the IPO proceeds will go to the selling shareholders.

The IPO will remain open for public bidding from October 3 to October 7 at a price band of Rs 615-648 apiece. Investors can bid for a minimum of 23 shares, requiring an investment of Rs 14,904, and in multiples thereafter.

The allotments will likely be finalized by October 8, and the shares are scheduled to debut on stock exchanges on October 10.

WeWork India IPO GMP:

Grey market estimates hint at a subdued debut for the shares of the co-working space provider. Ahead of listing, the unlisted shares of the company were trading at the IPO price with zero grey market premium (GMP), according to data on Investorgain. This is lower than the 2 percent GMP quoted by the site a day before the IPO opened for public bidding.

According to IPO Watch, the unlisted shares of the company were trading with around 0.8 percent GMP over the IPO price.

WeWork India IPO anchor book:

Embassy Buildcon-backed WeWork India Management raised Rs 1,348.26 crore from several anchor investors on October 1, a day before it launched its much-awaited IPO. Marquee investors like Goldman Sachs, Ashoka Whiteoak, Amundi Funds, Allianz Global, Integrated Core Strategies, BNP Paribas Financial Markets, and Societe Generale participated in the anchor book.

WeWork India IPO: Should you apply?

Angel One kept a 'Neutral' rating for the IPO. "At the upper IPO price band of Rs 648, WeWork India’s post-issue P/E stands at 67.75x, indicating a premium valuation; while the company is profitable and operates in a growing flexible workspace sector, high fixed costs, revenue concentration, and market risks make returns uncertain leading to a 'Neutral' recommendation," the domestic brokerage said.

HDFC Securities meanwhile noted that WeWork is a leading premium flexible workspace operator in India and has been the largest operator by total revenue for the past three fiscal years. It however noted that the IPO entirely being an OFS, net losses in some quarters, possibility of loss of key landlords and more are the key concerns.

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