Co-working firm EFC exploring FPO, other routes to raise funds for expansion

Co-working spaces firm EFC India on Thursday said it is exploring various options, including Follow-on Public Offer (FPO), to raise funds for expanding its capacity to 60,000 seats by the end of this fiscal.

The company said in a statement that it has recently signed around 5 lakh square feet of office spaces in Pune, Noida, Hyderabad, and Kolkata.

"We intend to expand the number of seats from the present 25,000-plus to nearly 60,000 by the end of this financial year."

"We are exploring various options, including FPOs, to raise the necessary funds for these expansions. However, I cannot comment on how much money will be raised at the moment," Umeash Sahhaaii, founder & CEO of EFC Ltd, said.

The company has recently concluded a fundraising round of Rs 90 crore through the preferential issue for future expansion.The EFC, which commenced its operations in 2012, is into office infrastructure, co-working spaces, and office design segments.

The company got listed on BSE through a reverse merger in the last fiscal.

The company's co-working space is branded Sprint, while the EFC brand represents its managed workspaces vertical.Sahhaaii said, "Our company has experienced accelerated growth in recent years, riding corporate India's demand for workspaces from a top line of around Rs 12 crore in FY19 to Rs 104 crore in FY23 without any external financial support and despite the interim disruptions caused by COVID-19."

EFC clocked in Rs 57.04 crore in total revenues and Rs 3.17 crore in net profit during Q1 FY24 on a consolidated basis.

"We derive 95 per cent of our revenues through rental income, following an anchor concept wherein one or two large-scale clients account for 80 per cent of the facility's occupancy where the agreement period is around 3-5 years, and the remaining 20 per cent is then offered to smaller clients, including co-working spaces," he added.

EFC has over 36 centres totalling 1.5 million-plus square feet of area and 25,000-plus seats across eight cities spanning seven states -- Maharashtra, Hyderabad, Tamil Nadu, Karnataka, Gujarat, Uttar Pradesh and West Bengal.

In its report 'India office market - Changing winds' released recently, real estate consultant Colliers India has estimated that the gross leasing of office space at 40-45 million square feet in the 2023 calendar year across six major cities as against 50.3 million square feet in the previous year.

During the first six months of this year, the gross leasing of office space stood at 24.7 million square feet. In the second half, it expects demand to be at 15.3-20.3 million square feet, lower than the first half.