WeWork India's Rs 3,000 Crore IPO Sees Tepid Response on Day 1
WeWork India's IPO opened with a muted start, aiming to raise Rs 3,000 crore. Within the first hour, it saw a 1% subscription rate, with retail investors showing slightly more interest at 6% of their allocation. The price band is set at Rs 615-648 per share, with the subscription period from October 3-7, 2023. The company operates 68 centers across eight cities, covering 7.35 million sq. ft. of workspace. WeWork India's financials show improvement, projecting a profit of Rs 128 crore for FY25, up from a loss of Rs 147 crore in FY23. The stock is valued at 65 times its projected FY25 earnings, leading to mixed analyst opinions.
*this image is generated using AI for illustrative purposes only.
WeWork India's highly anticipated Initial Public Offering (IPO) kicked off to a muted start, with investors showing cautious interest in the workspace solutions provider. The company aims to raise Rs 3,000 crore through this public offering, which opened for subscription on October 3.
Subscription Details
Within the first hour of opening, the IPO witnessed a subscription rate of merely 1%, with investors bidding for 2.83 lakh shares against the 2.54 crore shares on offer. The lukewarm response was particularly evident in the institutional investor segment, which showed minimal participation.
Retail investors, however, displayed slightly more enthusiasm, subscribing to 6% of their allocated portion. This early trend suggests a cautious approach from the investment community.
IPO Specifics
- Price Band: Rs 615 - Rs 648 per share
- Subscription Period: October 3 - October 7, 2023
- Listing Date: October 10, 2023
- Listing Venues: National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)
Market Sentiment
The grey market, often considered an indicator of investor interest, showed a premium of 2.31% over the issue price. This modest premium reflects a cautious but slightly positive sentiment among unofficial market participants.
Company Overview
WeWork India has established a significant presence in the country's commercial real estate sector:
- Operates 68 centers across eight cities
- Total workspace area of 7.35 million sq. ft.
- Notable clients include JP Morgan, Amazon, and Uber
Financial Performance
The company has shown remarkable financial improvement in recent years:
| Fiscal Year | Revenue (in Rs crore) | Profit After Tax (in Rs crore) |
|---|---|---|
| FY23 | 1,314 | -147 |
| FY25* | 1,949 | 128 |
*Projected
WeWork India's transition from a loss-making entity to a profitable one has caught the attention of market observers.
Valuation and Analyst Opinions
At the upper price band, the stock is valued at 65 times its projected FY25 earnings. This valuation has led to divided opinions among analysts:
- Positives: Market leadership position and successful turnaround to profitability
- Concerns: High valuation compared to current earnings
As the IPO progresses, investors will be closely watching subscription trends and institutional participation. The company's ability to maintain its growth trajectory and profitability will likely be key factors influencing investor decisions in the coming days.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult financial advisors before making investment decisions.
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