Awfis Space IPO oversubscribed on Day 2, with retail, NIIs support. Check GMP, subscription status, more. Apply or not?
- Awfis Space, a market leader in flexible workspace, offers significant growth potential with a dominant position in the market. Financial statements show increased revenue and reduced losses, with a positive outlook for future profitability. Investors willing to take risks can subscribe to the IPO.
Awfis Space Solutions IPO subscription status: The Awfis Space Solutions IPO attracted a lot of retail interest on its second day of the bidding process, which began on Wednesday, May 22. Awfis Space Solutions IPO subscription status was 4.28 times, as per BSE data.
The retail portion has been subscribed 12.27 times, while the non-institutional investors quota has received 6.82 times subscription. Qualified institutional buyers part has fetched 32% subscription. The employee portion has been booked 6.81 times.
The initial share sale received bids for 3,69,29,529 shares against 86,29,670 shares on offer, as per BSE data.
The initial public offer of co-working space operator got booked 2.03 times on the first day of bidding led by the retail portion. The retail individual investor category received 6.02 subscriptions, whilst the non-institutional investor quota received 2.76 subscriptions. The portion for qualified institutional buyers was booked 30%. The Peak XV-backed Awfis Space Solutions IPO will close on Monday, May 27.
32 anchor investors contributed ₹268.61 crore to Awfis Space Solutions Limited at an upper price range of ₹383 per equity share.Among the international funds that stood out were the Volrado Venture Partners Fund, HSBC Global Investors Fund, Allianz Global Investors Fund, Goldman Sachs Funds, and Natixis International Funds. Ashoka Whiteoak Emerging Markets Trust PLC and Ashoka Whiteoak ICAV took a larger investment position.
10% of the net offer is reserved forretail investors, 15% is reserved by non-institutional buyers, and 75% of the offer is offered to qualified institutional buyers (QIBs) through the book building process.
A discount of ₹36 per equity share is available to employees who are bidding in the employee reserve portion. Equity shares under the employee reservation section have a maximum value of ₹2 crore.
Awfis Space Solutions Ltd offers a broad range of flexible workspace solutions for start-ups, small and medium-sized businesses, large organisations, and multinational corporations, from individual flexible desk needs to customised office spaces.
The promoters of the firm include Peak XV, a promoter selling shareholder, and individual promoter Amit Ramani. Together, the promoters held 27,444,403 equity shares as on May 14, the date of this Red Herring Prospectus. This amount represented 41.05% of the company's fully diluted equity share capital that had been issued, subscribed for, and paid for prior to the Offer.
Awfis Space Solutions IPO Review
Mehta Equities
Rajan Shinde, Research Analyst, states that investors have a rare chance to participate in a market leader in the flexible workspace space—Awfis Space Solution Ltd.—as it ranks first out of five benchmarked firms in India.
With the entire addressable market predicted to reach 282 million sq. ft. and Rs. 474-592 billion by 2026, Shinde believes that Awfis Space's dominant position is supported by tremendous growth potential. Demand for flexible workspace is expected to surpass supply in Tier 2 cities by a factor of 1.7, while the market is expected to increase at a CAGR of 18–19% in Tier 1 cities. Awfis is well-positioned to benefit from this development. Additionally, we believe that the company's ground-breaking Managed Aggregation (MA) model has improved unit economics and operational efficiency by increasing operational seats to 66.43% by the end of 2023 and lowering capital cost per seat to ₹50,000.
According to the company's financial statements, operational revenue increased significantly in FY2022 and FY2023 by 44% and 112%, while losses decreased from ₹-57.16 crore to ₹-46.63 crore. In spite of obstacles, management is optimistic that the business will achieve net cash positive status by the end of the upcoming fiscal year. Because of the large disparity between supply and demand in the flexible workplace market, where Awfis plays, they see promising futures. This positive prognosis points to a significant potential for future development and profitability when combined with strategic efforts and market positioning.
Additionally, investors have to be aware of the offer's higher OFS, which worries novice investors. So, taking into account these factors, we suggest that only investors who are willing to take a chance can "Subscribe" to Awfis Space Solution Ltd.'s initial public offering (IPO) with the possibility of listing gains, Shinde said.
Highbrow Securities
Tarun Singh, MD, asserts that prudent investors have worries about the IPO. The company's ongoing financial problems cast doubt on its claims of market leadership and variety of goods. The firm has reported net losses of ₹42.64 cr. in FY21, ₹57.16 crore in FY22, and ₹46.67 crore. in FY23 despite rise in sales. These financial difficulties are emphasised by negative EPS and a low RoNW.
Given the company's continuous loss, pledges to become cash positive for the upcoming fiscal year seem dubious. The company's past financial difficulties are in contrast to the management's optimistic expectations.
"Further the IPO structure itself is concerning: only ₹128 crore. in fresh equity shares is being issued, while ₹470.93 crore. is allocated for an Offer for Sale (OFS). This raises doubts about the intentions behind the IPO, suggesting insiders may be looking to exit.
I think this IPO presents a risk the investors should critically assess. On the bright side, the flexible workspace sector is set for fast growth, driven by changing work habits, tech advancements, fiscal discipline, and sustainability," added Singh.
Awfis Space IPO details
Awfis Space Solutions IPO issue size comprises of a fresh issue of ₹128 crore and an offer-for-sale (OFS) of up to 12,295,699 equity shares of a face value of ₹10 each by the promoter selling shareholder, Peak XV Partners Investments V (formerly known as SCI Investments V), offloading up to 6,615,586 equity shares; other selling shareholders, Bisque Ltd, who intends to sell up to 5,594,912 equity shares; and Link Investment Trust, who is likely to sell up to 85,201 equity shares, as per the RHP. Awfis Space Solutions IPO size is worth ₹599 crore.
The company intends to use the net proceeds to fund the following objectives: capital expenditure for the establishment of new centres (42.03 crore); working capital requirements (54.37 crore); and general corporate purposes.
The book running lead managers for the Awfis Space Solutions IPO are ICICI Securities Limited, Axis Capital Limited, Iifl Securities Ltd, and Emkay Global Financial Services Ltd, while the registrar is Bigshare Services Pvt Ltd.
Awfis Space Solutions IPO GMP today
Awfis Space IPO grey market premium is +122. This indicates Awfis Space Solutions share price were trading at a premium of ₹122 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Awfis Space Solutions share price was indicated at ₹505 apiece, which is 31.85% higher than the IPO price of ₹383.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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