WeWork India's IPO Struggles with Tepid Response on Second Day
WeWork India's Rs 3,000-crore IPO received a subdued response, with only 4% subscription rate by the end of Day 1. The IPO, priced at Rs 615-648 per share, closes on October 7. Retail investors showed 14% interest, while institutional investors subscribed only 2%. The Grey Market Premium dropped from 2.76% to 0.77%, indicating waning enthusiasm. WeWork India operates 68 centers across 8 cities, covering 7.35 million sq ft. The company projects profitability by FY25 but is currently valued at a premium 65 times FY25 earnings compared to competitor Awfis Space's 58x P/E ratio.
*this image is generated using AI for illustrative purposes only.
WeWork India's Initial Public Offering (IPO) faced a lukewarm reception as it entered its second day of subscription. The Rs 3,000-crore IPO, which aims to raise capital for the co-working space provider, has seen a subdued response from investors thus far.
Subscription Details
The IPO, which opened on October 5, received bids for only 11.12 lakh shares out of the 2.54 crore shares on offer by the end of Day 1, representing a mere 4% subscription rate. Here's a breakdown of the subscription status:
| Investor Category | Subscription Rate |
|---|---|
| Retail Investors | 14% |
| Institutional Investors | 2% |
| Overall | 4% |
IPO Specifics
- Price Band: Rs 615-648 per share
- Subscription Period: Closes on October 7
- Expected Listing Date: October 10
- Listing Venues: National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)
Market Sentiment
The Grey Market Premium (GMP) for WeWork India shares has seen a notable decline:
- Initial GMP: 2.76%
- Current GMP: 0.77%
This drop in GMP suggests waning enthusiasm among investors in the unofficial market.
Company Overview
WeWork India has established a significant presence in the country's co-working space sector:
- Operational Footprint: 68 centers across 8 cities
- Total Area: 7.35 million sq ft
- Key Clients: JP Morgan, Amazon, Uber
Financial Performance
WeWork India has shown promising financial growth:
| Fiscal Year | Revenue (in Rs crore) | Profit/Loss (in Rs crore) |
|---|---|---|
| FY23 | 1,314 | -147 |
| FY25 (Projected) | 1,949 | 128 |
Valuation Insights
The IPO is currently valued at 65 times FY25 earnings, which appears to be at a premium compared to its peer:
- WeWork India: 65x P/E ratio
- Awfis Space (competitor): 58x P/E ratio
Concluding Thoughts
The tepid response to WeWork India's IPO, despite its projected profitability, suggests that investors may be approaching this offering with caution. The premium valuation compared to its peer could be a factor influencing investor sentiment. As the subscription window remains open until October 7, it will be crucial to monitor how investor interest evolves in the coming days.
Investors considering this IPO should carefully evaluate the company's growth prospects, the competitive landscape in the co-working sector, and the overall market conditions before making an investment decision.
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