The much-talked-about WeWork India IPO opens on October 3. The Rs 3,000 crore issue is entirely an offer for sale, and the bidding for the IPO will close on October 7. The issue price band is set between Rs 615-648 per share.
The proceeds of the issue will go directly to the shareholders, diluting their stake, but one of the key objectives of the public issue is to enhance its visibility and brand and provide liquidity to its existing shareholders. Moreover, the listing is expected to provide a public market for the equity shares in India.
Here is a look at some of the lesser-known facts about the WeWork IPO before you decide to subscribe.
WeWork India IPO: The Embassy Group connection
WeWork India shares a strategic relationship with the Embassy Group. It is a leading real estate developer, and its portfolio exceeds 85 million square feet. In fact they were the sponsors for India’s first REIT. As a result, this association provides WeWork India with a deep industry insight and access to premium office spaces.
Moreover, the partnership also helps differentiate WeWork “as one of the few flexible workspace operators in India backed by a major real estate developer, enabling multi-asset relationships and access to Embassy Group’s large tenant base seeking flexible workspace solutions,” added HDFC Securities in its analysis of the upcoming IPO.
WeWork India IPO: Global parentage a boon or a bane?
Additionally, WeWork benefits from its association with WeWork Global, which operates approximately 600 locations across 35 countries, strengthening its brand and operational expertise.
However, this also means that the company depends on WeWork International for the use of the “WeWork” trade name, logo and trademark which are licensed on a non-transferable and exclusive rights basis to own and operate WeWork locations in India. Thus, any disruption in WeWork International’s operations can impact the India brand adversely.
WeWork India IPO: Proceedings against promoter
A key risk with regard to the WeWork India IPO is the ongoing proceedings against one of the company’s promoters. As per the DRHP, he was named as one of the respondents in proceedings initiated by the Enforcement Directorate under the Prevention of Money Laundering Act, 2002, in 2014 in relation to allegations of corruption and irregularities in 2004 with respect to certain land development and housing projects awarded by the government. Any adverse outcome in this proceeding may adversely impact the company’s operations.
WeWork India IPO: Long-term relationships matter
That said, WeWork India has been able to attract and develop long-term relationships with global marquee brands, including Amazon Web Services India, JPMorgan Services India, Discovery Communications India, Grant Thornton Bharat, among others. As of June, the company had 87,247 members. SBI Securities pointed out that “the company has maintained a weighted average membership tenure with members of 26 months as of June. Additionally, the company’s weighted average membership tenure with Large Enterprise Members was 31 months as of June.”
WeWork India IPO: Why does it fail to retain existing members?
The WeWork India primarily generates revenue by charging membership fees for the use of workspaces. Generally the tenure of these agreements range anywhere between 1-3 years and can extend upto 6 years. However, the company, in the past, has experienced premature termination of agreements by its members. This directly impacts the revenue flow.
WeWork India IPO: Valuation
The company is the exclusive licensee of the WeWork brand in India and benefits from its relationship with WeWork Global, a global flexible workspaces operator with 600 wholly-owned and licensed locations in 35 countries. However, SBI Securities highlighted that the company achieved profitability in FY25 from recording net loss of in FY25. At the upper end of the IPO price band, “the issue is valued at an FY25 P/E multiple of 50.1x based on the post-issue capital, which seems fairly valued. We maintain a ‘Neutral’ view on the company and would like to monitor the performance of the company post listing,” added SBI Securities.