Smartworks Coworking Spaces Limited has announced a significant change in its investment portfolio. The company has reduced its ownership stake in Clean Max DOS Private Limited ("Clean Max") from 24.82% to 9.08%, resulting in Clean Max no longer being classified as an associate company of Smartworks Coworking.

Transaction Details

The stake dilution transaction was executed on August 21, 2025, as per the company's filing with the stock exchanges. Smartworks Coworking received a net consideration of INR 99,07,807.00 from the sale of its shares in Clean Max.

Impact on Company Status

As a result of this reduction in shareholding, Clean Max has ceased to be classified as an Associate of Smartworks Coworking under the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This change in status reflects the decreased influence of Smartworks Coworking in Clean Max's operations and decision-making processes.

Buyer Information

The shares were acquired by Clean Max Enviro Energy Solutions Limited (formerly Clean Max Enviro Energy Solutions Private Limited). Smartworks Coworking has confirmed that the buyer does not belong to the promoter, promoter group, or group companies of Smartworks.

Regulatory Compliance

The company has stated that this transaction does not fall under related party transactions and is not part of any scheme of arrangement. The expected date of completion for this sale is within one week from the agreement date.

Company Background

Smartworks Coworking Spaces Limited, formerly known as Smartworks Coworking Spaces Private Limited, is a provider of flexible workspace solutions. The company's registered office is located in New Delhi, with its corporate office in Gurgaon, Haryana.

This strategic move by Smartworks Coworking to reduce its stake in Clean Max may be part of the company's broader portfolio management strategy. However, the specific reasons for the stake reduction were not disclosed in the regulatory filing.

Smartworks Coworking Spaces Limited , India's largest managed office platform, has reported a strong start to the fiscal year, with significant growth in revenue and profitability for the first quarter ended June 30.

Financial Highlights

The company's revenue for Q1 stood at INR 3,792.00 million, marking a 21% year-over-year increase and a 5.8% sequential growth. This robust performance was driven by a combination of increased occupancy in existing centers and the addition of new operational space.

Smartworks' normalized EBITDA saw a substantial improvement, reaching INR 607.00 million, up 109% year-over-year. The normalized EBITDA margin expanded to 16%, reflecting strong operational efficiency and disciplined cost management.

The company's focus on cash flow generation was evident, with normalized operating cash flow (OCF) increasing by 71% year-over-year to INR 855.00 million in Q1.

Operational Performance

As of June 30, Smartworks' operational area stood at 8.3 million square feet, with an overall occupancy rate of 83%. The company's operational footprint translates to approximately 190,000 seats, with mature centers (over 165,000 seats) showing a committed occupancy revenue exceeding 90%.

During the quarter, Smartworks added about 5,900 occupied seats, bringing the total occupied seats to around 158,500. The company's revenue per square foot reached approximately INR 173.00, excluding ancillary revenue.

Expansion Plans and Future Outlook

Smartworks has ambitious growth plans, with a target to reach 12 million square feet of operational area in the near future. The company has already signed agreements for an additional 1.9 million square feet, which will translate to 43,000 new seats by the end of the fiscal year.

Neetish Sarda, Managing Director of Smartworks, stated, "We expect to grow from our current 190,000 operational seats to 275,000 seats within the next 4 to 5 quarters, based on our signed contracts and ongoing fitouts."

The company aims to maintain its growth trajectory, targeting an annual addition of 30,000 to 40,000 seats, which aligns with its historical CAGR of 30-35% year-on-year.

Cost Efficiency and Financial Strategy

Smartworks highlighted its industry-leading cost efficiency, with a capex of INR 60,000.00 per seat and an opex of INR 34.00 to INR 36.00 per square foot. The company attributes this efficiency to economies of scale, standardization, and its ability to take on entire buildings as campuses.

Post-IPO, Smartworks is in a net debt-negative position, with its cost of borrowing at approximately 9%. The company expects its debt levels to become negligible over the next two years, further strengthening its financial position.

Market Position and Client Base

Smartworks continues to focus on enterprise clients, with 90% of its Q1 revenue coming from this segment. The company's multi-city clients now contribute over 30% of its revenue, indicating strong client retention and expansion within the Smartworks ecosystem.

Harsh Binani, Executive Director, emphasized the company's strategic choice of taking entire buildings, stating, "Our ability to recover capex in 32 months on long-term leases creates a strong entry barrier and turns our buildings into ROCE machines as they mature."

As Smartworks continues to expand its footprint and enhance its operational efficiency, the company remains well-positioned to capitalize on the growing demand for flexible workspace solutions in India's commercial real estate market.

Key Financial and Operational Metrics for Q1

With its strong financial performance and ambitious expansion plans, Smartworks is poised for continued growth in the flexible workspace market, leveraging its efficient operating model and focus on enterprise clients.