Awfis Space Solutions IPO Review: Awfis Space Solutions is coming up with its IPO issue of Rs. 598.53 Cr which will open on 22nd May 2024. The issue will close on 27th May and be listed on the exchange on 30th May 2024. This article will analyze the strengths and weaknesses of the Awfis Space Solutions IPO Review 2024. Keep reading to find out!

Awfis Space Solutions IPO Review – Company overview

Awfis Space Solutions is the largest flexible workspace solutions company in India. The Company is ranked 1st among the top 5 benchmarked players in the flexible workspace segment with a presence in 16 cities in India also present in a maximum number of micro-markets in India. 

The Company has a total of 169 centers across 16 total cities in India, with 1.05 Lakh total seats covering a total area of 5.33 million sq. ft. Out of the 169 centers 31 centers and 25,312 seats are under fit-out with chargeable area aggregating to 1.23 million sq. ft. 

In addition, the Company has entered into signed letters of intent (“LOI”) with space owners for 13 additional centers, with 10,859 seats aggregating to 0.55 million sq. ft.

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As of December 31, 2023, Awfis has over 2,295 clients and has a presence in 52 micro markets in India. The Company provides a wide spectrum of flexible workspace solutions ranging from individual flexible desk needs to customized office spaces for start-ups, small and medium enterprises (SMEs) as well as for large corporates and multi-national corporations. 

Its flexible workspace solutions cater to varied seat cohorts ranging from a single seat to multiple seats, which can be contracted for a period ranging from one hour to several years. 

Over time, Awfis has evolved from a co-working space to an integrated workspace solutions platform. Its core solution is co-working solutions which include flex workspaces, customized office spaces, and mobility solutions. 

The entire Awfis workspace solutions Platform can be visualised in the diagram below:

Source: RHP of the Company

Awfis Space Solutions IPO Review – Industry Overview

Due to the COVID-19 pandemic, there has been a reverse migration of workers to a certain extent, due to which employees are seeking increased flexibility as a result, several organizations have decentralized operations, and the demand for hub and spoke model and flexible workspaces have increased. 

Further, with the accelerated demand for flexible workspaces pandemic, the penetration levels of the flexible workspace sector in the office space (non-SEZ) segment have seen a steep jump of approximately 39% from 9% in 2020 to 12.5%. 

The penetration levels of the flexible workspace sector in the office space (non-SEZ) segment in India are expected to increase to approximately 15.5% in 2026. The demand for seats in flexible workspaces has been continuously rising in the last 3-4 years and growing at an average annual growth rate of 30%-40% from 2019-2021.

The seat take-up is increasing at a CAGR of approximately 42% from approximately 59,000 – 69,000 seats per year in 2019 to approximately 167,000 – 177,000 seats per year in 2022 and is expected to reach 335,000 – 345,000 seats per year by 2026. 

IT, technology, and software development sectors have been the major demand drivers for flexible workspaces in the last three to four years, followed by banking, financial services, and insurance (BFSI), which has witnessed an increase in the demand for space from flexible workspace operators over the years. 

In addition, the total market size of the flexible workspace segment has more than tripled in the last three to four years from over 20 million sq. ft. before 2019 to approximately 62 million sq. ft. as of December 31, 2023, in Tier 1 cities. 

Awfis Space Solutions IPO Review – Financials

Awfis Space Solutions earns 77% of its FY23 revenue as rent from its Co-working spaces. Awfis Workspaces has greatly reduced exposure from this segment as back in FY21 it contributed to nearly 91% of its revenue.

The Company’s 2nd largest revenue generator turns out to be Construction and fit-out projects, which are shared office space customized to the needs of larger clients. These contribute to about 24% of the Company’s revenue, up from just 6.4% in FY21.

In FY23 Awfis reported a gross revenue of Rs. 545 Cr, which increased by 112% from Rs. 257 Cr in FY22. The Company has been growing at the rate of 75% CAGR since FY21. Most of the growth came from the increasing rentals of the working spaces. The Construction & Fit-Out segment performing slightly better than the plain vanilla rentals.

Talking about profitability the Company isn’t profitable yet. In FY23, Awfis Space Solutions reported a Net Loss of Rs. 47 Cr, which reduced from a loss of Rs. 57 Cr in FY22. increased revenue without the growth in profits has resulted in a Net Profit margin falling from -20.51% to just -8.24% in FY23.

Awfis Space Solutions IPO Review – Key Players 

Awfis Space Solutions does not have any peers listed on the Indian exchanges and hence it will not be possible to compare it with its peers.

Strengths of the Company 

  1. Leadership in a large & growing marketplace: The Total Addressable market for flexible workspace operators represents a sizeable opportunity to cover. Awfis Space Solutions is already a market leader & is constantly expanding to grow its share.
  2. Transformative business model: The Company is shifting from the traditional leasing of the entire office building from a landlord and offering individual space to a more collaborative approach. 
  3. Strong Demand & diversified customer base: The Company has a strong customer base of 2295 clients and has sold as many as 36,020 seats in FY23. The Top client of Awfis contributes to only 3% of its FY23 revenues and the Top 5 clients bring in only 13%.
  4. Customer Acquisition and Retention:  In FY23, 62.86% of our seats sold were through direct channels, that is sales were completed without the involvement of a broker and 37.14% of our seats sold were through brokers. Due to its sales & marketing, 80% of the centers were filled 7.15 months from the launch.
  5. Reputable Space Owner Portfolio: The office space owners range from a diverse spectrum of large real estate developers to HNIs, family offices, and other funds. Some of the notable names include Prestige Estates Ltd, Nyati Projects Landmark, Vajram Holdings, and many others.

Weaknesses of The Company

  1. Loss Maker: Awfis Space Solutions had and continues to be a loss maker. Although the Company has doubled its revenue over the last few years, it has not undergone any difference in terms of its profitability.
  2. Negative Cash Flows: In the past three years of operations, the Company has experienced Negative cash flow from Investing & Financing activities. The reason for this is the Company is rapidly expanding which is leading to greater outflow than inflow of cash.
  3. Inability to maintain strong revenue growth: The Company’s revenue growth has been at a superficial pace and this growth rate might not be sustained in the years to come.
  4. Impact of Macroeconomic factors: The demand for the Company’s office spaces depends on other macroeconomic factors such as the growth of IT, professional services, and other such industries. Any disruption to these can significantly impact the Awfis’ financials.

Awfis Space Solutions IPO Review – GMP

The shares of Awfis Space Solutions traded at a 20.89% premium in the grey market on 16th May 2024. The shares in Grey Market traded at Rs 463. This gives it a premium of Rs 80 per share over the cap price of Rs 383.

Awfis Space Solutions IPO Review – Key IPO Information

IPO SizeRs. 598.93 Cr
Fresh IssueRs. 128 Cr
Offer for Sale (OFS) Rs. 470.93 Cr
Opening date22 May 2024
Closing date27 May 2024
Face ValueRs.10
Price BandRs.364 - 383
Lot Size39 Shares
Minimum Lot Size1 Lot (39 Shares)
Maximum Lot Size13 Lots (507 Shares)
Min. InvestmentRs. 14,937
Listing Date30 May 2024

Promoters: Amit Ramani and Peak XV Partners Investments

Book Running Lead Manager: ICICI Securities Ltd, Axis Capital Ltd, IIFL Securities Ltd, and Emkay Global Financial Services Ltd

Registrar to the Offer: Bigshare Services Pvt Ltd

The Objective of the Issue

  1. Rs. 42 Cr to be utilized towards funding Capital Expenditure towards the establishment of new centers.
  2. Rs. 54 Cr to be utilized towards Working Capital Requirements
  3. The remaining proceeds are to be utilized for General Corporate Purposes.


Awfis Space Solutions is the largest flexible workspace solutions company in India, operating 169 centers across 16 cities. The company has shown strong revenue growth, doubling its revenue from Rs. 257 crore in FY22 to Rs. 545 crore in FY23. However, the company continues to make losses, reporting a net loss of Rs. 47 crore in FY23.

The IPO looks attractive given Awfis’ leadership position in a large and growing market for flexible workspaces. The company’s strengths include a transformative business model, a strong and diversified customer base, effective customer acquisition and retention strategies, and a reputable portfolio of space owners.

On the flip side, the company’s inability to achieve profitability, negative cash flows due to rapid expansion, and dependence on macroeconomic factors impacting demand for office spaces are key weaknesses to consider. Overall, while the IPO presents an opportunity to invest in a market leader in the flexible workspace segment.

Written by Nasir Hussain

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