The ₹3,000-crore IPO of co-working space operator WeWork India scraped through on the final day of bidding on Tuesday, driven by institutional demand even as retail investors stayed away from the issue.
Qualified institutional buyers bid for 1.79 times their quota, while retail investors subscribed 0.61 times. The portion for non-institutional investors only received 0.23 times subscription.
The company had offered a price band of ₹615-648 per share, which many considered to be steep. The IPO was also red-flagged by proxy advisory firm InGovern who pointed out that the full offer for sale with no new capital infusion — along with its pre-listing conditions — raises questions on promoter intent, financial sustainability and oversight.
One concern is the temporary release of pledged promoter shares before the IPO. Over 53 per cent of WeWork India’s pre-IPO shares held by Embassy Buildcon were earlier pledged against about ₹2,065 crore of borrowings.
However, the promoter is contractually obligated to re-pledge these shares within five working days if the IPO listing does not occur within 45 days of release, failing which the pledge trustee may enforce the pledge, InGovern observed.
The company is going to continue to operate under an exclusive licence from WeWork Global, the US firm once valued at $47 billion before it shelved its 2019 IPO.
WeWork India is seeking a valuation of ₹8,685 crore at the top end of its price band, a figure that far exceeds those of its recently listed peers. IndiQube Spaces was valued at ₹4,413 crore in July, while Smartworks Coworking Spaces debuted at ₹5,296 crore.
“Compared with peers like Awfis or Smartworks, WeWork is priced at a premium, making investors cautious,” Aishvarya Dadeech, CIO at Fident Asset Management, told Reuters.
