Smartworks Coworking Spaces IPO: All you need to know

India’s commercial office stock stands at an estimated 883 million square feet as of March 31, 2025. It is forecast to grow at a CAGR of 6.7% to 1,072 million square feet by the end of 2027. Flexible workspace solutions are becoming an integral part of the modern work culture, catering to diverse working styles and introducing flexibility to the commercial office market. The total flexible workspace stock, ranging between 82–86 million square feet by the end of CY2024, is forecast to grow to approximately 140–144 million square feet across Tier 1 cities by the end of CY2027, with a CAGR of approximately 18–20%. The total addressable market for flexible workspace operators represents a sizeable opportunity of 280–300 million square feet (in terms of area) and ₹730,000–960,000 million (in terms of value) by 2027.

Smartworks Coworking Spaces Ltd. is an office experience and managed campus platform. As of March 31, 2024, Smartworks was the largest managed campus operator among benchmarked operators in terms of total stock, with a lease-signed portfolio of 8 million sq. ft. As of March 31, 2025, the company has leased and manages a total super built-up area of 8.99 million sq. ft.

Smartworks typically focuses on leasing entire or large bare shell properties in prime locations from landlords and transforming them into fully serviced, aesthetically pleasing, and tech-enabled campuses with daily-life and aspirational amenities. These campuses are equipped with modern and aesthetically pleasing designs using an extensive design library, integrated proprietary technology solutions, and amenities such as cafeterias, sports zones, smart convenience stores, gymnasiums, crèches, and medical centres.

The company’s centres offer clients’ employees a modern, attractive, and aesthetically pleasing work environment. It caters to the needs of teams of all sizes, from under 50 to over 6,300 seats, with a specific focus on mid-to-large enterprises having a requirement of over 300 seats.

Smartworks’ revenue increased from ₹7,113.92 million in FY23 to ₹13,740.56 million in FY25, registering a CAGR of 39.4%. Total income grew from ₹7,440.70 million to ₹14,096.69 million, reflecting a CAGR of 37.2%. This growth was underpinned by a rise in super built-up area from 6.80 million sq. ft in FY23 to 8.99 million sq. ft in FY25, a 15% CAGR, and an increase in operational centres from 31 to 46 and cities served from 12 to 15. EBITDA nearly doubled from ₹4,239.98 million to ₹8,572.64 million (CAGR of 42.2%), with margins remaining robust at 62.39% in FY25 versus 59.60% in FY23. Though the company continued to report net losses, these narrowed from ₹1,010.46 million in FY23 to ₹631.79 million in FY25, with losses as a percentage of total income improving significantly from -13.58% to -4.48%. Capital employed increased from ₹3,055.13 million to ₹4,071.32 million, while ROCE improved materially from 11.90% to 42.30%, supported by better asset utilization and EBITDA expansion. Operationally, Smartworks scaled its total capacity seats from 137,564 in FY23 to 203,118 in FY25 (CAGR of 21.8%), while occupied seats rose from 105,565 to 152,619 (CAGR of 20.4%), and occupancy rates in operational centres improved from 76.74% to 83.12%, enhancing centre-level economics. The client base also expanded from 521 to 738 (CAGR of 18.9%), reflecting growing enterprise adoption, although seat retention moderated from 96.24% to 86.83%, still remaining at a healthy level.

Objects of the issue:

1. Repayment/Prepayment of borrowings- ₹1140 million
2. CAPEX in new centres- ₹2258.40
3. General Corporate Purposes

 

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