Dev Accelerator to launch ₹125-crore IPO: Financials, business model, competitors and other key details

Flexible workspace solutions provider Dev Accelerator Ltd, which operates under the brand name DevX, has filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (Sebi) for an initial public offer (IPO).

The ₹125-crore IPO consists of a fresh issue of up to 2.47 crore shares of a face value of ₹2 each. The stock is expected to be listed on both the National Stock Exchange (NSE) and BSE.

If you want to invest in the company through its upcoming public issue, here are some key details to check ahead of subscription:

Business model

Dev Accelerator, an entity promoted by listed company Dev Information Technology Ltd, commenced its operations in 2017. The company offers comprehensive office space solutions tailored to the needs of diverse businesses.

DevX provides integrated services from sourcing office spaces, customised designs, developing spaces and technology solutions to complete asset management.

The company has categorised its service offerings into three divisions— managed office solutions, co-working space solutions, design and build solutions (offered through its subsidiary Needle and Thread Designs LLP).

It has a presence across 15 submarkets in India covering Tier 1 cities of Delhi-NCR, Hyderabad, Mumbai, Pune and Tier 2 cities of Ahmedabad, Indore, Jaipur, Udaipur and Vadodara. In addition to these, the company also has an operational centre in Rajkot.

In addition, it has also received signed letters of intent with space owners for three additional centres, including one international centre in Sydney, Australia.

As on August 31, 2024, DevX had serviced over 230 clients and had 25 centres across 11 cities in India. The company’s clientele comprises large corporations, multinational corporations (MNCs) and small and medium enterprises (SMEs).

Financials

Dev Accelerator has witnessed an over 87% compounded annual growth rate (CAGR) in turnover between FY 2021-22 and FY 2023-24.

The company recorded a revenue of ₹108 crore in FY24 compared to ₹70 crore in FY23 and ₹30.9 crore in FY22.

Its net profit in FY24 stood at ₹44 lakh compared to a loss of ₹12.8 crore in FY23 and a loss of ₹7.5 crore in FY22.

The company’s occupancy rates for FY24, FY23 and FY22 stood at 83.09%, 80.84% and 80.8%, respectively, indicating high degree of satisfaction among clients.

Competition

Currently, there are over four hundred flex space operators in India. However, an industry report said that the top seven players dominate the market, accounting for nearly 51% of the flex office stock across the top seven markets in India.

Dev Accelerator’s competitors include WeWork, AWFIS, Smartworks, Table Space, Incuspaze, IndiQube and Simpliwork.

The company said in its Red Herring Prospectus that the flexible workspace industry in India is highly competitive, with numerous global and domestic operators fighting for market share. Increased competition can lead to price wars, reducing profit margins and creating challenges for operators to differentiate their offerings, it added.

Dev Accelerator IPO purpose

Dev Accelerator plans to use the funds raised through the IPO towards funding the capital expenditure for fit-outs in its new centre as well as for its security deposits.

Apart from this, proceeds would also be used towards the repayment and/or pre-payment, in full or part, of certain borrowings availed by the company, including redemption of non-convertible debentures, and for general corporate purposes.