Smartworks Reports Rs 50 Crore Loss As It Prepares For IPO

Smartworks Coworking Spaces Ltd., which is gearing up for its initial public offering, reported a consolidated net loss of close to Rs 50 crore in the last fiscal year due to elevated expenses.

Recently, the company, a prominent provider of managed office spaces for corporates, submitted a draft red herring prospectus to SEBI, the capital markets regulator, to secure funding through an IPO.

The company's net loss was reported at Rs 49.95 crore in the fiscal year 2023–24, which is a 50% reduction from the Rs 101 crore loss in the previous financial year, according to the draft red herring prospectus.

Meanwhile, the total income increased to Rs 1,113.11 crore in the 2023–24 fiscal year, up from Rs 744 crore in the prior year.

Smartworks' proposed IPO includes a fresh issue of equity shares valued at Rs 550 crore and an Offer for Sale of 67.59 lakh shares by the promoters, according to the draft red herring prospectus.

The company plans to use Rs 140 crore for the repayment, prepayment, or redemption of certain borrowings.

Smartworks plans to allocate Rs 282.3 crore for capital expenditures on fit-outs at new centres and for security deposits at these centres. The remaining funds will be used 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...".

(With PTI Inputs)