WeWork India Addresses Governance Concerns in IPO Filing
WeWork India Management has responded to governance concerns raised by proxy advisory firm InGovern regarding its IPO. The company defended its 100% Offer for Sale structure, citing sufficient cash flow and EBITDA generation. It clarified its financial position, reporting improved net worth of 1,896.82 million and an adjusted EBITDA of 4,212.55 million. WeWork India disclosed criminal proceedings involving promoters, confirmed a 99-year brand license, and committed to resolving internal financial control weaknesses by March 2025. The company used IPO proceeds of approximately Rs 1,748 crore to retire debt, reducing pledged shares to 15%.
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WeWork India Management has responded to governance concerns raised by proxy advisory firm InGovern regarding its Initial Public Offering (IPO). The company has provided clarifications on various aspects of its business structure, financial performance, and regulatory compliance.
IPO Structure and Financial Position
WeWork India defended its 100% Offer for Sale IPO structure, citing:
- Sufficient free cash flow and EBITDA generation
- Promoter investment of Rs 5,012.81 million made at a higher valuation than the IPO upper price band
The company filed its IPO under SEBI Regulation 6(2), which applies to companies not meeting profitability requirements.
Financial Performance
WeWork India addressed concerns about its financial position:
| Metric | Value |
|---|---|
| Negative Net Worth | 4,374.50 |
| Improved Net Worth | 1,896.82 |
| Adjusted EBITDA | 4,212.55 |
| Occupancy Rate | 80.70% |
| Adjusted EBITDA Margin | 21.61% |
The company attributed the negative net worth to lease accounting norms and highlighted positive operating cash flows since FY2023.
Governance and Legal Matters
WeWork India disclosed:
- Criminal proceedings involving promoters Jitendra and Karan Virwani in offer documents
- Confirmation of a valid 99-year WeWork brand license under promoter control
- Resolution of material weaknesses in internal financial controls by March 2025
Use of IPO Proceeds
The company reported that IPO proceeds of approximately Rs 1,748 crore were used to retire debt, resulting in a reduction of pledged shares to 15%.
WeWork India's response aims to address the concerns raised by InGovern and provide transparency to potential investors. As the IPO process continues, market participants will closely monitor these clarifications and their impact on investor sentiment.
Historical Stock Returns for WeWork India Management
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.67% | -0.40% | +2.17% | +2.17% | +2.17% | +2.17% |
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