Indian coworking firm shares rise 7% after oversubscribed IPO

Smartworks Coworking Spaces, based in Gurugram, saw its shares begin trading this week at a 7% premium over its initial public offering (IPO) price.

The stock opened at Rs 435 rupees (US$5,06) on the National Stock Exchange and 436.1 rupees (US$5,07) on the Bombay Stock Exchange, compared to the issue price of 407 rupees (US$4,74).

The IPO raised 445 crore rupees (US$51.7 million) through new share issuance, while existing shareholders sold shares worth 137.6 crore rupees (US$16 million) via an offer for sale (OFS).

The offering was oversubscribed 13.92 times, with total bids reaching about 5,700 crore rupees (US$663,288).

Smartworks plans to use the proceeds for capital expenditure, debt repayment, and general corporate purposes.

Despite a net loss of 63.17 crore rupees (US$7.3 million) in FY25, Smartworks grew its revenue to 1,374 crore rupees (US$159,886) and operates 48 centers with over 190,000 seats.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ Coworking’s paradoxical investment appeal despite profitability challenges

Despite ongoing profitability challenges across the coworking sector, investors continue to show strong confidence in these businesses.

Smartworks posted net losses of Rs 63.17 crore in FY25 and Rs 49.95 crore in FY24, yet its IPO was oversubscribed 13.92 times, generating bids worth approximately Rs 5,700 crore [original article].

This aligns with the broader industry pattern where only 40% of coworking spaces were profitable as of 2017, with most requiring at least two years to achieve profitability 1.

WeWork India shows a similar trajectory, reporting losses of Rs 135.77 crore in FY24 despite growing revenue by 26% to Rs 1,665.14 crore, yet still securing SEBI approval for its IPO 2.

The persistent investment despite these financial challenges suggests investors are betting on the long-term structural shift toward flexible workspaces rather than immediate profitability.

This dynamic creates a challenging balancing act for operators who must demonstrate both growth and a credible path to profitability to maintain market confidence.