Awfis Space Solutions IPO opens for subscription: Check strengths, weaknesses, price band and other key details

The initial public offering (IPO) of Awfis Space Solutions Ltd, one of India’s largest flexible workspace providers, opens on Wednesday, May 22.

Shares in the ₹598.93-crore IPO are being offered at a price band of ₹364-383 each in the lot size of 39 for retail investors.

The public issue was fully subscribed after launch with biddings for over 92.7 lakh shares compared to 86.29 lakh shares on offer, the NSE data until 2:15 pm showed. The mainboard IPO is open for subscription from May 22 to May 27.

If you are considering investing in the Awfis Space IPO, a look at the key strengths and weaknesses of the company may help you make a more informed decision. Take a look:

About Awfis Space Solutions

The company was incorporated as Awfis Space Solutions Private Limited at Delhi on December 17, 2014. The company was converted from a private limited company to a public limited company on November 24, 2023, and the name was changed to Awfis Space Solutions Ltd.

As on December 31, 2023, Awfis Space had 138 operational centers aggregating to 4.10 million sqft, and 2,295 clients.

To know more and apply for Awfis Space Solutions IPO, click here

Growth seen by the company so far

The number of operational centres of the company has consistently grown from 58 centres at the end of Fiscal 2021 to 84 centers at the end of Fiscal 2022 to 119 centres at the end of Fiscal 2023 and 138 centers as at December 31, 2023.

Awfis intends to establish 45 new centres under the ‘Awfis’ format in Fiscal 2025, out of which setting up of 33 new centres shall be funded from internal accruals while setting up of the balance 12 new centres shall be funded from the net proceeds of the IPO.

The new centres to be funded from the net proceeds shall be established in Mumbai, Bengaluru, National Capital Region of Delhi, Hyderabad, Pune, Chennai, Kolkata, Ahmedabad, Bhubaneswar, Chandigarh, Indore, Kochi, Nagpur and Jaipur.

Risks and threats

• In FY23, Awfis revenue stood at ₹545 crore compared with ₹257 crore in FY22. In FY24, for the nine-month period ended December 2023, revenue was ₹616 crore.

• Awfis posted a leaner loss of ₹46.6 crore in FY23 compared with a loss of ₹57.1 crore in FY22. In FY24, for the nine-month period ended December 2023, loss stood at ₹18.9 crore.

• The biggest red flag in the IPO could be the company consistently incurring losses due to increases in its depreciation and amortisation expenses, employee benefits expenses and finance costs.

• It has also experienced negative cash flows from investing and financing activities between FY21 and Q3FY24.

• There is also no guarantee on future partnerships with space owners on favorable revenue-sharing models, which might affect its profitability. Along with that, the risks associated with the development and construction of spaces -- such as delays in construction, contract disputes and claims, and fines or penalties levied by government authorities – may adversely play on the company’s growth plans.

• Dependent on coworking spaces located in Bangalore, Mumbai, Pune and Hyderabad, which accounted for 67% of its rental income as of 31 December 2023.

To sum up, investors should weigh on the strengths of the evolving flexible workspace model in India along with the challenges the sector poses before making a decision in the Awfis Space IPO.

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