WeWork affirms operational strength, rejects InGovern's IPO report over compliance

WeWork India Management Limited has issued a detailed clarification rejecting a report from proxy advisory firm InGovern Research Services. The report raised concerns about the company's financial health, corporate governance, and the structure of its ₹3,000 crore Initial Public Offering (IPO), which was open for subscription from October 3 to 7 and listed on the BSE and NSE on October 10.

InGovern claimed that WeWork India’s IPO would benefit only selling shareholders and promoters, as all proceeds are being raised through an Offer for Sale (OFS) with no fresh capital for the company. WeWork India clarified that the structure reflects its strong financial position.

The company said its operations generate sufficient EBITDA and free cash flow after debt obligations to fund ongoing capital expenditure and growth, making a primary capital raise unnecessary. It also noted that its promoters had invested ₹5,012.81 million through a rights issue on January 11, 2025, at a price above the IPO’s upper range, underscoring their continued commitment to the business.

“Highest EBITDA”

WeWork India also refuted InGovern’s claims about its financial sustainability, asserting that it remains operationally profitable despite accounting adjustments that affect reported figures. The company reported an Adjusted EBITDA of ₹4,212.55 million in FY25, with a 21.61% margin, up from ₹3,397.47 million in FY24. It said this measure more accurately reflects its cash performance and argued that Ind AS 116 lease accounting has artificially reduced its net worth. "As per CBRE, we have the highest EBITDA amongst benchmarked peers in the industry," WeWork said.

Clarifying InGovern’s corporate governance concerns, WeWork India said all details of the ongoing legal proceedings involving its promoters have been “adequately disclosed” in the IPO offer documents under the section “Outstanding Litigation and Other Material Developments.” InGovern had cited the criminal proceedings against promoters Jitendra and Karan Virwani as potential risks to the company’s governance profile.

InGovern warned of potential risks from promoter shares pledged for borrowings before the IPO, noting that a delay in listing could have led to re-pledging and affected promoter control. WeWork India clarified that its shares were listed on October 10, within 45 days of the pledged shares being released on September 16, removing any such risk. The company added that these risks were already disclosed under the “Risk Factors” section of its IPO documents.