High-Profile Investors Back Smartworks
Smartworks allocated 42,66,378 equity shares at ₹407 per share—the upper end of its IPO price band of ₹387-₹407—to a diverse group of 13 anchor investors. The round was led by prominent names such as Tata Mutual Fund, Baroda BNP Paribas, and SBI General Insurance, with participation from Aditya Birla Sun Life Insurance, Axis New Opportunities AIF – Series II, Buoyant Opportunities Strategy II, Societe Generale, and others. This robust backing from domestic mutual funds, alternative investment funds (AIFs), insurance firms, and foreign portfolio investors underscores the market’s optimism about Smartworks’ business model and its potential for long-term growth.
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Table of Contents
Strategic Timing Ahead of IPO
The anchor round, finalized on July 9, 2025, sets the stage for Smartworks’ IPO, which opens for public subscription from July 10 to July 14, 2025, with a listing scheduled for July 17 on the BSE and NSE. The IPO comprises a fresh issue of shares worth ₹445 crore and an offer-for-sale (OFS) of 33.79 lakh shares aggregating to ₹137.56 crore. The anchor funding not only bolsters Smartworks’ financial position but also generates significant market buzz, with the grey market premium (GMP) ranging from ₹25-₹33, indicating a potential listing gain of 6-8%.
Fueling Expansion and Debt Reduction
Strategic Allocation of Funds
Smartworks plans to deploy the ₹445 crore from the fresh issue strategically. Approximately ₹114 crore will be used to repay outstanding loans, addressing the company’s consolidated debt of ₹382 crore as of April 2025. The remaining funds will support capital expenditure for fitting out new office centers and covering security deposits for leased properties, with a portion allocated for general corporate purposes. The OFS proceeds will go to promoters, reducing their stake from 65.2% to 58.3% post-IPO. This dual focus on debt reduction and expansion reflects Smartworks’ commitment to financial discipline and growth.
Scaling a Robust Portfolio
Founded in 2016, Smartworks has grown into India’s largest managed campus operator, managing over 8.99 million square feet across 50 centers in 15 cities, including Bengaluru, Mumbai, Hyderabad, Gurugram, Chennai, Pune, and Noida. Between FY23 and FY25, the company added 2.83 million square feet, achieving a compound annual growth rate (CAGR) of 20.8%. As of March 2025, Smartworks served 738 clients, including major corporates like Google, Philips, Groww, and MakeMyTrip, with a seat capacity of 152,619 and an occupancy rate of 83.1%. An additional 12,044 seats remain unoccupied, offering room for growth.
The company’s asset-light strategy, which involves leasing office spaces from landlords and sub-leasing to corporates, has driven operational efficiency. With a retention rate of 87% and a committed operational occupancy rate of 89% as of June 2025, Smartworks is well-positioned to capitalize on the surging demand for flexible workspaces in India’s Tier-1 cities.
Navigating Financial Challenges
Revenue Growth Amid Losses
Smartworks reported a revenue of ₹1,409.67 crore in FY25, up from ₹1,113.11 crore in FY24, reflecting strong operational growth. However, the company remains loss-making, posting a net loss of ₹63.17 crore in FY25, driven by higher expenses. Despite this, its EBITDA margins have improved, and its fit-out costs per square foot are nearly half the industry average, highlighting cost efficiency. Analysts like Anand Rathi recommend a “subscribe for long term” rating, citing Smartworks’ scalability and the growing managed workspace market, though SBI Securities advises caution due to persistent losses.
Market Dynamics and Risks
The flexible workspace sector in India is experiencing a boom, with a 38.3% CAGR from 2020-2024, outpacing industry growth. Smartworks’ focus on mid-to-large enterprises and value-added services like Fit-out-as-a-Service strengthens its business model. However, risks such as geographic concentration in Tier-1 cities and ongoing losses could pose challenges. The company’s shift to variable rental and management contracts aims to improve capital efficiency, mitigating some of these concerns.
Investor Sentiment and Market Buzz
Strong Grey Market Premium
The grey market premium (GMP) for Smartworks’ shares, ranging from ₹25-₹33 as of July 10, 2025, suggests a listing price of ₹432-₹440, implying a 6-8% gain. On Day 1, the IPO was subscribed 23% by noon, driven by retail (26%) and non-institutional investors (32%), indicating healthy initial interest. The allocation structure—50% for qualified institutional buyers (QIBs), 35% for retail, and 15% for non-institutional investors—ensures broad participation.
Analyst Perspectives
Analysts are cautiously optimistic. Master Capital Services, Geojit, and Anand Rathi recommend subscribing for long-term gains, citing Smartworks’ strong operating metrics and market leadership. However, concerns about its loss-making status and geographic concentration have led to mixed reviews, with some urging investors to weigh short-term risks against long-term potential.
A Strategic Milestone for India’s Startup Ecosystem
Looking Ahead
As Smartworks embarks on its IPO journey, the ₹173.64 crore anchor round sets a strong foundation. The funds will enable the company to reduce its debt burden, expand its footprint, and enhance its offerings in a competitive market. While challenges like persistent losses and geographic concentration remain, Smartworks’ cost-efficient model, robust client base, and strategic vision position it as a key player in India’s flexible workspace revolution.
With the IPO subscription open until July 14 and a listing slated for July 17, all eyes are on Smartworks to deliver on its promise of growth and profitability. As India’s startup ecosystem continues to evolve, Smartworks’ journey from a $20 million anchor round to a public listing could mark a defining moment for the country’s coworking industry.High-Profile Investors Back Smartworks
Smartworks allocated 42,66,378 equity shares at ₹407 per share—the upper end of its IPO price band of ₹387-₹407—to a diverse group of 13 anchor investors. The round was led by prominent names such as Tata Mutual Fund, Baroda BNP Paribas, and SBI General Insurance, with participation from Aditya Birla Sun Life Insurance, Axis New Opportunities AIF – Series II, Buoyant Opportunities Strategy II, Societe Generale, and others. This robust backing from domestic mutual funds, alternative investment funds (AIFs), insurance firms, and foreign portfolio investors underscores the market’s optimism about Smartworks’ business model and its potential for long-term growth.
Strategic Timing Ahead of IPO
The anchor round, finalized on July 9, 2025, sets the stage for Smartworks’ IPO, which opens for public subscription from July 10 to July 14, 2025, with a listing scheduled for July 17 on the BSE and NSE. The IPO comprises a fresh issue of shares worth ₹445 crore and an offer-for-sale (OFS) of 33.79 lakh shares aggregating to ₹137.56 crore. The anchor funding not only bolsters Smartworks’ financial position but also generates significant market buzz, with the grey market premium (GMP) ranging from ₹25-₹33, indicating a potential listing gain of 6-8%.
Fueling Expansion and Debt Reduction
Strategic Allocation of Funds
Smartworks plans to deploy the ₹445 crore from the fresh issue strategically. Approximately ₹114 crore will be used to repay outstanding loans, addressing the company’s consolidated debt of ₹382 crore as of April 2025. The remaining funds will support capital expenditure for fitting out new office centers and covering security deposits for leased properties, with a portion allocated for general corporate purposes. The OFS proceeds will go to promoters, reducing their stake from 65.2% to 58.3% post-IPO. This dual focus on debt reduction and expansion reflects Smartworks’ commitment to financial discipline and growth.
Scaling a Robust Portfolio
Founded in 2016, Smartworks has grown into India’s largest managed campus operator, managing over 8.99 million square feet across 50 centers in 15 cities, including Bengaluru, Mumbai, Hyderabad, Gurugram, Chennai, Pune, and Noida. Between FY23 and FY25, the company added 2.83 million square feet, achieving a compound annual growth rate (CAGR) of 20.8%. As of March 2025, Smartworks served 738 clients, including major corporates like Google, Philips, Groww, and MakeMyTrip, with a seat capacity of 152,619 and an occupancy rate of 83.1%. An additional 12,044 seats remain unoccupied, offering room for growth.
The company’s asset-light strategy, which involves leasing office spaces from landlords and sub-leasing to corporates, has driven operational efficiency. With a retention rate of 87% and a committed operational occupancy rate of 89% as of June 2025, Smartworks is well-positioned to capitalize on the surging demand for flexible workspaces in India’s Tier-1 cities.
Navigating Financial Challenges
Revenue Growth Amid Losses
Smartworks reported a revenue of ₹1,409.67 crore in FY25, up from ₹1,113.11 crore in FY24, reflecting strong operational growth. However, the company remains loss-making, posting a net loss of ₹63.17 crore in FY25, driven by higher expenses. Despite this, its EBITDA margins have improved, and its fit-out costs per square foot are nearly half the industry average, highlighting cost efficiency. Analysts like Anand Rathi recommend a “subscribe for long term” rating, citing Smartworks’ scalability and the growing managed workspace market, though SBI Securities advises caution due to persistent losses.
Market Dynamics and Risks
The flexible workspace sector in India is experiencing a boom, with a 38.3% CAGR from 2020-2024, outpacing industry growth. Smartworks’ focus on mid-to-large enterprises and value-added services like Fit-out-as-a-Service strengthens its business model. However, risks such as geographic concentration in Tier-1 cities and ongoing losses could pose challenges. The company’s shift to variable rental and management contracts aims to improve capital efficiency, mitigating some of these concerns.
Investor Sentiment and Market Buzz
Strong Grey Market Premium
The grey market premium (GMP) for Smartworks’ shares, ranging from ₹25-₹33 as of July 10, 2025, suggests a listing price of ₹432-₹440, implying a 6-8% gain. On Day 1, the IPO was subscribed 23% by noon, driven by retail (26%) and non-institutional investors (32%), indicating healthy initial interest. The allocation structure—50% for qualified institutional buyers (QIBs), 35% for retail, and 15% for non-institutional investors—ensures broad participation.
Analyst Perspectives
Analysts are cautiously optimistic. Master Capital Services, Geojit, and Anand Rathi recommend subscribing for long-term gains, citing Smartworks’ strong operating metrics and market leadership. However, concerns about its loss-making status and geographic concentration have led to mixed reviews, with some urging investors to weigh short-term risks against long-term potential.
Looking Ahead:
As Smartworks embarks on its IPO journey, the ₹173.64 crore anchor round sets a strong foundation. The funds will enable the company to reduce its debt burden, expand its footprint, and enhance its offerings in a competitive market. While challenges like persistent losses and geographic concentration remain, Smartworks’ cost-efficient model, robust client base, and strategic vision position it as a key player in India’s flexible workspace revolution.
With the IPO subscription open until July 14 and a listing slated for July 17, all eyes are on Smartworks to deliver on its promise of growth and profitability. As India’s startup ecosystem continues to evolve, Smartworks’ journey from a $20 million anchor round to a public listing could mark a defining moment for the country’s coworking industry.
also read: Bridge Rounds and Down Rounds: Fueling 500+ Indian Startups’ Resilience in 2025
Last Updated on Thursday, July 10, 2025 10:59 am by Swayam Sharma
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