Will WeWork India's IPO attract investors amid mixed financial signals?

ET Intelligence Group: WeWork India, a flexible workplace operator, plans to raise ₹3,000 crore through an offer for sale. The promoter stake will fall to 48.1% after the IPO from 73.6%. The company's revenue and Earnings before interest, taxes, depreciation and amortisation ( Ebitda) are higher than its peers. However, it has just started recording profit in FY25, due to deferred tax credit. About 47% of its revenue comes from Bengaluru and 24% comes from Mumbai, reflecting geographic concentration. Occupancy rate in mature centres is less than peers. Given these factors, investors may wait to see clarity in financials after the listing.

Business
Incorporated in 2016, Bengaluru headquartered WeWork India provides flexible workspace solutions, custom-designed buildings, floors and offices, and hybrid digital solutions. The company has an exclusive license of the WeWork Brand in India. As of June 2025, it operated 68 centres across eight cities including Bengaluru, Mumbai, Pune, Hyderabad, Gurugram, Noida, Delhi, and Chennai, with a total capacity of 114,077 desks spanning 7.7 million square feet. Occupancy rate in mature centres is 80.7% compared with 84-89% for its peers.

Financials
The company's revenue and operating profit before depreciation and amortisation after adjusting for lease rental payments grew 22% and 48% annually between F23 and FY25 to ₹1949.2 crore and ₹1,235.9 crore respectively. The company reported a profit of ₹128 crore in FY25, due to a deferred tax credit of ₹286 crore. Adjusted Ebitda margin expanded to 21.6% in FY25 from 14.6% in FY23. Net debt declined to ₹215.3 crore from ₹339.1 crore during the period.

Valuation
Price-to-earnings multiple will be an inappropriate tool to ascertain the valuation since the company has just started recording profits while most of the peers are yet to be profitable. The price-to-sales (P/S) multiple for WeWorks is 4.6 compared with that of 3.4-4.7 for peers, which includes Smartworks Coworking Spaces, IndiQube Spaces and Awfis Space Solutions.