In December last year, Andhra Pradesh chief minister N Chandrababu Naidu, in a bid to boost employment opportunities for women, ordered state officials to facilitate development of co-working spaces and “neighbourhood working spaces”. By the end of 2025, Andhra Pradesh aims to set up 1,50,000 seats in co-working space centres in government and private buildings.
While this push comes from the government, private players are on similar trajectories.
Umesh U, co-founder and managing director of DevX, whose company is an office base provider with aesthetic spaces, and has a strong presence in tier-2 cities, told FE, “The next growth spurt in this industry will be driven by demand in tier-2 and tier-3 cities.”
Amit Ramani, chairman and managing director of Awfis Space Solutions, agreed. Since September 2023, he said, Awfis has increased its footprint in tier-2 cities by 43%—going from 14 to 20 centres, most recently opening up a space in Guwahati. He went on to explain that multiple factors at play—hybrid work models, a growing emphasis on health and wellness, integration of technology and innovation, and increased focus on collaboration— have helped build this industry up, and these factors are here to stay.
Said Umesh, “2025-26 will be a standout year for the industry as 8-10 large companies in this space will be getting listed on the stock exchange. With companies going public, we can expect capital infusion of Rs 12,000-15,000 crore.” He added, “We might also see consolidation across the spectrum—acquisitions and mergers will happen more frequently as companies would want to establish a strong presence in tier-1,tier-2, and tier-3 cities.”
What the DevX co-founder said is already happening. In June 2024, flexible workspace firms Qdesq and MyBranch released a joint report noting that between 2020 and 2024, flexible workspaces in non-metro cities recorded a 4x growth, and were set to grow to 25% of the entire market by the end of the year.
In fact, back in 2021, real estate consultant CBRE’s The Future is Flex report had also mentioned that “cautious expansion” to tier-2 cities is where the money lies in the co-working business.
Metros or small towns, the industry is on a high recently. The year promises to be big for co-working spaces, with many of them having filed for IPOs in 2024, and more expected this year.
Towards the fag end of 2024, WestBridge Capital-backed IndiQube Spaces, a managed workplace solutions company, filed its draft red herring prospectus (DRHP) with capital markets regulator Securities and Exchange Board of India (SEBI), eyeing an initial public offering (IPO) of Rs 850 crore.
In May 2024, Awfis Space Solutions got listed with an IPO of Rs 598.93 crore. A couple months later, Smartworks Coworking Spaces filed its DRHP, eyeing an IPO of Rs 550 crore.
Co-working spaces provider DevX also followed suit and filed its DRHP in September, preparing for an IPO with 2.47 crore equity shares, eyeing Rs 125 crore. Umesh U, co-founder and managing director of DevX, told FE, “We hope to get listed within this financial year itself.”
Most recently, WeWork India (a joint venture between Bengaluru-based Embassy Group and US giant WeWork), which had raised Rs 500 crore in January through a rights issue, filed its draft papers with the SEBI, with an offer for sale of 4.37 crore equity shares.
According to media reports, Bengaluru-based BHIVE Workspace is also looking to launch its IPO in 2026. Reports also suggest that Table Space, backed by equity fund Hillhouse Capital, has started its IPO process, with the target to get listed in 2025.
This trend of managed office space companies going public is not sudden. A report by Avendus Capital, a capital market firm, in March 2024 had pointed that the flexible office spaces industry, which was valued at $3.5 billion in 2023 could become a $9 billion opportunity by the year 2028.
The growth potential
Post COVID, the co-working spaces business has seen sharp growth. In April 2024, CBRE noted in a report that flex workspaces were leasing out 22% of India’s total gross office leasing space of 144 lakh sq ft, between January-March 2024, a 7% increase from the same quarter in 2023.
Ramani of Awfis said after its recent IPO, the company was oversubscribed 108.56 times and saw revenue growth of 40% in Q2 of FY 24-25 over the previous year, “reaching Rs 292 crore.”
Sameer Singh, COO of 91Springboard, a co-working and flex spaces firm that’s spread across 8 cities and 30 hubs, shared that the customer base in this industry is extremely wide — from freelancers and early-stage start-ups, to mid-stage start-ups and small and medium enterprises (SMEs), to large enterprises, MNCs, and major corporates.
It’s also that flex space companies are now expanding to multi-genre services, through which they boast of interesting offerings — private offices, shared desks, event spaces — and can unlock new revenue streams.
There’s another area where co-working spaces have a lot of scope. According to NASSCOM, a not-for-profit industry association, the GCC (Global Capability Centers or the strategic unit of MNCs) market in India is projected to grow at a compound annual growth rate of 7-8%, reaching more than 4,300-4,400 GCCs by 2030. Ramani said co-working spaces like his are well-positioned to capitalise on this trend and the scale of the opportunity is immense too.
For Singh of 91Springboard, one of the most exciting developments to look forward to is how the “hotelisation” of flex spaces is reshaping the industry. He said, “Inspired by the hospitality industry, flex spaces are tailoring experiences and amenities to meet the needs of diverse customer cohorts and price points. From tiered membership models to tech-enabled operations and sustainable designs, flex spaces are also embracing modern demands while fostering vibrant communities and collaboration.”
Singh added that investors are also looking at flex spaces as an investment in real estate. “Hotelisation is poised to deliver superior experiences, consistent returns, and enduring value for users, investors, and communities alike,” he claimed.
Ramani, too, is excited about more innovation in the industry. “The next big development would be the integration of technology and sustainability into our spaces.”