Smartworks Coworking Spaces, which is about to go public, reports a loss of Rs 50 crore in the last fiscal year due to higher expenses

Smartworks Coworking Spaces Ltd, which plans to launch its first public issue, has reported a consolidation net loss of nearly 50 crores during the last fiscal year about higher costs. Last week, Smartworks Coworking Spaces, one of the leading providers of managed workspaces office space For companies, it filed a draft red herring prospectus (DRHP) with capital markets regulator Sebi to raise funds through a Initial public offering (IPO).

According to the DRHP, the company’s net loss stood at Rs 49.95 crore in fiscal year 2023-24, down 50 per cent from Rs 101 crore in the previous fiscal.

However, total revenue rose to Rs 1,113.11 crore during fiscal year 2023-24, from Rs 744 crore in the previous year.

According to the DRHP, the proposed IPO of Smartworks comprises a fresh issue of equity shares worth Rs 550 crore and an offer for sale (OFS) of 67.59 lakh shares by promoters and investors.

The company would utilise Rs 140 crore for repayment, prepayment or redemption of certain borrowings. Smartworks proposes to utilise Rs 282.3 crore for capital expenditure for fit-out of the new centres and for security deposits for the new centres. The remaining funds will be utilised for general corporate purposes. As on March 31, 2024, the company’s total outstanding borrowings were Rs 427.35 crore.

Currently, Smartworks has 41 operational coworking centres spanning 7.36 million square feet of office space and over 1.66 lakh desks.

Approximately 0.79 million square feet of area and 19,427 desks are under development, bringing the total portfolio to 43 centers, 8.15 million square feet of area and 185,467 desks.

Smartworks has a presence in 13 cities including Delhi-NCR, Bengaluru, Hyderabad and Chennai.

“We typically focus on leasing entire or large, bare-metal properties in prime locations from landlords and transforming them into fully-serviced, aesthetically pleasing, technology-enabled campuses with aspirational and everyday living amenities,” Smartworks said in the DRHP.

The company serves the needs of clients of all team sizes, from less than 50 to more than 4,800 seats, with a specific focus on medium and large companies requiring more than 300 seats.

In the DRHP, Smartworks highlighted that its revenue from operations increased to Rs 1,039.36 crore in the last fiscal year, from Rs 711.39 crore in 2022-23.

The company said its goal is to “generate and sustain higher levels of revenue and decrease commensurate expenses in future periods to achieve profitability.”

Smartworks said it has “achieved positive EBITDA” but has “generated a net loss over the past three fiscal years…”

The Indian office market, including the coworking segment, has seen a strong recovery post the COVID pandemic.

In the coworking space segment, Awfis recently launched its public issue. Pune-based EFC (I) Ltd is already listed on the stock exchanges.

Other major players also have plans to launch their public broadcasts.