Awfis Space Solutions IPO opened for subscription Wednesday, May 22 and will close on Monday, May 27. Awfis Space IPO raised a capital of ₹268.61 crore through an anchor book process, where 32 investors took part in the anchor book offering, on Tuesday, May 21.
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 possessed 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.
The issue size of the Awfis Space Solutions IPO consists of a fresh offering of ₹128 crore and an offer-for-sale (OFS) of up to 12,295,699 equity shares with a face value of ₹10 each by the promoter selling shareholder, Peak XV Partners Investments V (previously known as SCI Investments V), which plans to sell up to 6,615,586 equity shares; additional selling shareholders include Bisque Ltd, which plans to sell up to 5,594,912 equity shares, and Link Investment Trust, which, according to the RHP, is likely to sell up to 85,201 equity shares. The value of Awfis Space Solutions’ IPO is ₹599 crore.
Axis Capital Limited, Iifl Securities Ltd, ICICI Securities Limited, and Emkay Global Financial Services Ltd are the book running lead managers and Bigshare Services Pvt Ltd is the registrar for the Awfis Space Solutions IPO.
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Here are some of the key risks listed by the company in its Red-Herring Prospectus (RHP):
- The business has a track record of net losses, negative return on net worth (RoNW), and negative earnings per share (EPS). In order to achieve profitability, the firm must grow and maintain its revenue while controlling costs. Failure to meet these objectives might have a negative impact on our operations, business, cash flows, and financial health.
- It’s possible that the business won’t be able to draw in enough new business, keep hold of its current clientele—some of whom sign short-term service contracts (Client Agreements)—or agree on reasonable prices to grow and maintain its clientele.
- According to their MA model, they must locate space owners, form partnerships with them, and come to agreements on profit or revenue sharing with these owners. They cannot guarantee that, in order to expand their business and overall profitability, they will be able to draw in additional space owners on favourable terms.
- Their business, operating results, cash flows, and financial situation might all suffer as a result of the risks that are inherent in the SL model, which they might not be able to manage.
- To expand their clientele and bring in money, they rely on these partnerships. Any unfavourable customer experience might hinder business development and profitability as well as their capacity to draw in and keep customers.
- As of December 31, 2023, centres in Bangalore, Mumbai, Pune, and Hyderabad accounted for 67.82% of their rental income from co-working spaces. As a result, a sizable amount of their co-working space income comes from centres that are concentrated in a small number of cities, and any unfavourable developments affecting these centres, cities, or regions could have a negative impact on their operations, financial situation, and business.
- Because their company involves providing services at their centres that meet high quality requirements, operational risks are a given. Their business, operational outcomes, cash flows, and financial situation might all suffer if these risks are not managed.
- Their company’s operations, financial situation, and performance might all be impacted if they are unable to pay back their existing debts.
- Their company, prospects, and operational outcomes may be negatively impacted by evolving laws, rules, and regulations as well as legal concerns, including the unfavourable application of tax laws.
- Investors may be liable for Indian taxes on income received from dividend distributions and equity share sales.
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Published: 23 May 2024, 03:00 PM IST
