The office rental market has seen hectic activity over the past few years and more so after the return-to-office mandates of companies. Co-working spaces have seen strong traction as a result of this heightened demand for flexible office space requirements from established companies, captives and start-ups. Some estimates peg the total addressable market for flexible workspaces to be ₹73,000-96,000 crore by CY2027.
Many companies operating in the office space leasing segment have listed over the past year or so.
After Awfis Space Solutions in May last year, Smartworks Coworking Spaces and Indiqube Spaces in recent months, the largest (by revenue and EBITDA) player in the segment, WeWork India Management has come out with an initial public offering (IPO) of shares.
The issue is available for subscription till October 7. The company is looking to raise about ₹3,000 crore at the upper end of the price band (₹615-648). The issue is entirely an offer for sale with the proceeds going to the selling shareholder Embassy Group.
At ₹648, WeWork India would trade at an EV to sales multiple of around 4.6 times and an EV to EBITDA multiple (enterprise value to EBITDA) of 7.3 times based on FY25 numbers. In comparison, Awfis trades at EV to sales of close to 3.4 times and an EV to EBITDA multiple of around 10 times. Smartworks trades at an EV to Sales multiple of 4.9 times and an EV to EBITDA multiple of 7.9 times, while Indiqube is available at EV to sales of 4.9 times and EV to EBITDA of 8.4 times.
Given that WeWork India is the largest player and is coming with the IPO at lower multiples than peers, investors with a three-four-year perspective can consider taking exposure to the company, and not for any listing gains.
Except Awfis, no other player is profitable at the net level, which is the reason it would be the top choice in the office leasing segment. WeWork was loss-making at the net level in FY23 and FY24, while in FY25, it turned in net profits due to one-offs (largely due to a deferred tax credit).
However, WeWork India is a solid player with a base of marquee clients, a lucrative grade-A portfolio with presence in top cities, robust occupancy levels and reasonably healthy lease renewal rates.
The original global parent WeWork filed for bankruptcy in the US in 2023, but came out of bankruptcy in 2024 as a private company. However, these proceedings have no effect on WeWork India, as it is majority owned by the Embassy Group and pays a small management fee to the parent for the brand usage.
The parentage of the Embassy Group, which is an entrenched player in the commercial real estate segment is another positive for the company.
Between FY23 and FY25, WeWork India saw revenue from operations increase at 21.8 per cent compounded annually to ₹1,949.2 crore in FY25, while EBITDA rose at a CAGR of 24.7 per cent over the same period to ₹1,236 crore. The EBITDA margin of 63.5 per cent is the highest among listed peers.
The reason for such a large EBITDA not translating to net profits is that there are heavy deductions due to depreciation and amortization, as well as interest costs. Depreciation and amortisation expenses in FY25 totaled to nearly Rs 824 crore, while interest costs were Rs 598 crore. This picture is set to change in the coming quarters as these expenses are front-loaded while signing leasing contracts.
The debt equity ratio is manageable at around 0.65 times as of March 2025. The management expects that figure to come down significantly by March 2026.
Marquee base, healthy operations
The company leases spaces from landlords. It then constructs offices or workspaces with all amenities for its clients. It has three revenue streams. Membership, which accounted for 85.2 per cent of revenues in FY25, represents lease income from clients. Service and ancillary (11.1 per cent) revenues is another significant chunk. The remaining revenue comes from clients asking for digital offerings like on-demand workspaces and related services.
WeWork India is present in 68 centres spread across eight cities, all of them being metros or tier 1 cities such as Bengaluru, Mumbai, Gurugram, Hyderabad and Chennai as of June 2025.
It has over 1.14 lakh operational desk capacity and a total operational lease area of 7.7 million sq ft as of June 2025. When under fit-outs and area waiting to be handed over are taken into consideration, the total leasable area goes up to 8.1 million sq ft and desk capacity to 1.21 lakh seats.
Among its clients are companies such as JP Morgan, Amazon Web Services, Uber, Deutsche Telecom, Warner Bros Discovery, Grant Thornton, new relic, Moss Adams and The Scalers, among many others.
The top sectors from which companies seek leasing services from the company include technology, finance, professional services, media, manufacturing and pharma.
WeWork India has an occupancy of 76.8 per cent (March 2025), which is healthy. The occupancy rate in mature centres is higher at 80.7 per cent. Renewal rates are strong at 74.7 per cent.
On weighted average membership tenure, WeWork has a figure of 26 months. For large enterprises, it is higher at 31 months as of June 2025. These figures are quite reasonable, especially given the premium pricing the company commands on leasing.
As an example, WeWork has much fewer seats in operations than any competitor, and is yet able to deliver much higher revenues and EBITDA with solid margins.
Given that it is a leading operator in a growing space, the prospects for WeWork appear robust for the foreseeable future.
Published on October 4, 2025
