Smartworks Coworking Spaces logs Rs 50 crore net loss in FY24

Smartworks Coworking Spaces Ltd, which plans to launch its maiden public issue, has reported a consolidated net loss of nearly Rs 50 crore during the last fiscal year on higher expenses.

Last week, Smartworks Coworking Spaces, one of the leading providers of managed office space to corporates, filed a draft red herring prospectus (DRHP) with capital markets regulator Sebi to raise funds through an Initial Public Offering (IPO).

According to the DRHP, the company's net loss stood at Rs 49.95 crore in the 2023-24 fiscal, down 50 per cent from Rs 101 crore in the preceding financial year.

Total income, however, rose to Rs 1,113.11 crore during 2023-24 fiscal, from Rs 744 crore in the preceding year.

As per the DRHP, Smartworks proposed IPO comprises a fresh issue of equity shares worth Rs 550 crore and an Offer-For-Sale (OFS) of 67.59 lakh shares by promoters and investors.

The company would utilise Rs 140 crore towards repayment or prepayment or redemption of certain borrowings.

Smartworks proposes to use Rs 282.3 crore towards capital expenditure for fit-outs in the new centres and for security deposits of the new centres.

The remaining funds will be utilised for general corporate purposes.

As on March 31, 2024, the company's total outstanding borrowings was Rs 427.35 crore.

At present, Smartworks has 41 co-working centres operational comprising 7.36 million square feet of office space and over 1.66 lakh desks.

Around 0.79 million square feet area and 19,427 desks are in pipeline, taking the total portfolio to 43 centres, 8.15 million square feet area and 1,85,467 desks.

Smartworks has presence in 13 cities including Delhi-NCR, Bengaluru, Hyderabad and Chennai.

"We typically focus on leasing entire/ large, bare shell properties in prime locations from landlords and transform them into fully serviced, aesthetically pleasing and tech-enabled campuses with daily-life and aspirational amenities," Smartworks said in the DRHP.

The company caters to clients' needs of all team sizes, from under 50 to over 4,800 seats, with a specific focus on mid-to-large Enterprises having a requirement of over 300 seats.

In the DRHP, Smartworks highlighted that its revenue from operations increased to Rs 1,039.36 crore last fiscal, from Rs 711.39 crore in 2022-23.

The company said it is aiming to "generate and sustain increased revenue levels and decrease proportionate expenses in future periods to achieve profitability".

Smartworks said it has "achieved a positive EBITDA" but has "generated a net loss in the last three fiscals...".

India's office market, including the co-working segment, has witnessed a sharp recovery post-COVID pandemic.

In the co-working space segment, Awfis recently launched its public issue. Pune-based EFC (I) Ltd is already listed on stock exchanges.

Other major players also have plans to launch their public issues.