Smartworks Coworking Spaces IPO: Unlocking the Future of Flexible Work Environments

Smartworks Coworking Spaces Limited, a leading provider of customized managed workspace solutions, is set to launch its Initial Public Offering (IPO). This offering provides an opportunity for investors to engage with a company at the forefront of India’s evolving commercial real estate landscape, specializing in fully serviced, tech-enabled office environments designed for modern enterprises. The IPO is scheduled to open on Thursday, July 10, 2025, and will close on Monday, July 14, 2025.

Crucial Shariah Status

For investors guided by Islamic financial principles, it’s important to note that Smartworks Coworking Spaces Ltd. is currently categorized as Non-Shariah Compliant.

This classification primarily stems from the company’s financial ratios, specifically the interest-bearing debt to total assets, which stands at 80.36% and fails the Shariah compliance rule. This percentage exceeds acceptable Shariah limits for debt. While the business model itself, providing customized managed workspace solutions, passes the Shariah screening, and impermissible income to total revenue is 2.3%, the significant level of interest-bearing debt renders the company non-compliant. The company also passes the illiquid assets to total assets ratio at 84.27%, net liquid assets versus market capitalization, and non-compliant investments to total assets rules.

Therefore, for Muslim investors prioritizing strict Shariah compliance, Smartworks Coworking Spaces Ltd. IPO may not be considered a permissible investment avenue due to its financial structure and debt levels.

About Smartworks Coworking Spaces Ltd.: Redefining the Workplace Experience

Incorporated to offer cutting-edge, managed workspace solutions, Smartworks Coworking Spaces Limited provides fully serviced, technologically advanced office environments. These spaces are thoughtfully designed with aesthetics and essential amenities to cater to the unique needs of enterprises and their employees.

Smartworks caters to a diverse clientele, including mid-to-large enterprises, Indian corporations, multinational companies (MNCs), and startups. The company offers modern campuses that integrate superior design, technology, and a comprehensive suite of amenities such as cafeterias, gyms, crèches, and medical centers, all aimed at enhancing employee well-being and productivity.

As of March 31, 2025, Smartworks served 738 clients with a total of 152,619 seats. Currently, the company has 728 clients and 169,541 seats, with an additional 12,044 seats yet to be occupied. Notably, as of March 31, 2024, Smartworks holds four of India’s five largest leased coworking centers, including the massive 0.7 million square feet Vaishnavi Tech Park in Bengaluru.

Smartworks’ Business Model: An Integrated Ecosystem The company’s managed campus platform fosters a dynamic ecosystem involving key stakeholders:

• Clients: Smartworks specializes in providing customizable, tech-enabled workspaces for large and emerging enterprises across major Indian cities. Their solutions offer modern, cost-efficient offices and amenities that boost employee well-being and productivity.
• Landlords: Smartworks partners with non-institutional landlords, transforming their properties into fully serviced ‘Smartworks’ branded campuses. This collaboration offers landlords rental assurance, efficient management, and long-term leases, benefiting both property owners and tenants.
• Clients’ Employees: Employees enjoy fully serviced, tech-enabled centers complete with amenities like cafeterias, gyms, crèches, and medical centers. This environment promotes collaboration, team building, and overall well-being.
• Service Partners: Smartworks collaborates with various service partners, such as Chaipoint and ClearTax, to provide value-added amenities like cafeterias, gyms, and medical centers. This not only enhances the employee experience but also offers partners access to a large customer base.

Competitive Strengths:

• Market leadership supported by scale and consistent growth.
• Ability to lease and transform large properties across India’s key clusters into amenity-rich ‘Smartworks’ branded Campuses.
• Strategic focus on acquiring large enterprise clients and growing alongside them.
• Strong execution capabilities, driven by cost efficiencies, effective processes, and robust technology infrastructure.
• Financial acumen and strategic execution abilities that ensure capital efficiency, minimizing equity expenditure for capital and working capital needs.
• A risk-mitigating strategy that contributes to a financially stable business model.

Smartworks Coworking Spaces IPO: Key Details

The Initial Public Offering of Smartworks Coworking Spaces Ltd. is structured as a Bookbuilding Issue. The IPO will open on Thursday, July 10, 2025, and is scheduled to close on Monday, July 14, 2025. The total issue size is 1,43,13,400 shares, aggregating up to ₹582.56 Crores. This includes a fresh issue of 1,09,33,660 shares (aggregating up to ₹445.00 Crores) and an Offer for Sale (OFS) of 33,79,740 shares of ₹10 each (aggregating up to ₹137.56 Crores).

• IPO Open Date: July 10, 2025 (Thursday)
• IPO Close Date: July 14, 2025 (Monday)
• Face Value: ₹10 per share
• Issue Price Band: ₹387 to ₹407 per share
• Lot Size: 36 Shares
• Total Issue Size: 1,43,13,400 shares (aggregating up to ₹582.56 Crores)
• Sale Type: Fresh Capital-cum-Offer for Sale
• Employee Discount: ₹37.00
• Issue Type: Bookbuilding IPO
• Listing At: BSE, NSE
• Share Holding Pre Issue: 10,31,89,592 shares
• Share Holding Post Issue: 11,41,23,252 shares

Lot Size Details

Company Financials (Restated Consolidated)

Revenue increased by 27% and profit after tax (PAT) dropped by 26% between the financial year ending March 31, 2025 and March 31, 2024.

Key Performance Indicator (KPI)

KPI as of Monday, March 31, 2025.

Objects of the Issue: Purpose of the IPO Funds

Smartworks Coworking Spaces IPO proposes to utilize the Net Proceeds from the issue towards the following key objectives:

• ₹114.00 crores for repayment, prepayment, or redemption, in full or in part, of certain outstanding borrowings availed by the company.
• ₹225.84 crores for capital expenditure for fit-outs in new centers and for security deposits of these new centers.
• The remaining funds will be allocated for general corporate purposes.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Smartworks Coworking IPO is currently ₹28.5, representing 7.00% over the issue price. This unofficial indicator reflects market sentiment and can fluctuate.

Conclusion and Investor Outlook

Smartworks Coworking Spaces Ltd. is a prominent player in India’s managed workspace sector, showcasing significant operational scale and strategic growth initiatives. While the company’s expansion plans and market position are notable, potential investors should carefully consider the financial metrics, including the Shariah compliance status due to its debt levels, and the recent drop in PAT. An informed investment decision is best made after thorough research aligned with individual investment goals and risk tolerance.

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SEBI Disclaimer: Investment in securities markets are subject to market risks, read all the related documents carefully before investing. The information provided in this article is for educational and informational purposes only and does not constitute financial advice. Investors should consult with qualified financial professionals before making any investment decisions.