Smartworks Coworking Spaces Files DRHP for IPO Backed by Keppel

Smartworks Coworking Spaces, the largest managed campus operator in India, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The IPO will consist of a fresh issuance of equity shares worth Rs.550 crore, alongside an offer-for-sale (OFS) of 67.59 lakh equity shares by existing shareholders.

Offer-for-Sale Breakdown

In the OFS, promoters NS Niketan LLP and SNS Infrarealty LLP will offload 16 lakh shares, while 51.59 lakh shares will be sold by Space Solutions India Pte, an investor backed by Keppel, which has been involved with Smartworks since 2019. Prior to filing the Red Herring Prospectus with the Registrar of Companies (ROC), Smartworks may also consider raising an additional Rs.110 crore through a pre-IPO placement. If successful, this amount will be deducted from the fresh issue size.

Shareholding & Fundraising

Currently, the promoters hold a 69.19% stake in Smartworks on a fully diluted basis, with the remaining 30.81% owned by public shareholders. Space Solutions India holds a 19% stake, while Ananta Capital Ventures Fund owns 1.08%.

Smartworks has seen major backing from investors like Keppel, with Space Solutions India Pte investing Rs.177.22 crore in 2019 through compulsorily convertible preference shares (CCPS). In 2024, Smartworks raised an additional Rs.168 crore via private placements from Space Solutions India, Ananta Capital Ventures Fund 1, Plutus Capital, and others.

Utilization of Proceeds

The company plans to allocate Rs.140 crore from the fresh issue to repay debt. Additionally, Rs.282.3 crore will be used for fit-outs and security deposits in new centers, with the remainder allotted for general corporate purposes.

Conclusion: In conclusion, as of March 2024, Smartworks operates in 13 cities across India and with JM Financial, BOB Capital Markets, IIFL Securities, and Kotak Mahindra Capital Company serving as book-running lead managers, Smartworks’ IPO showcases the  company’s growth journey, setting the stage for expansion in this sector.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.