WeWork India experienced a subdued initial public offering (IPO) on October 10, 2023, as investor sentiment remained cautious. The stock debuted at Rs. 650 on the National Stock Exchange (NSE), up slightly by 0.31% from the issue price of Rs. 648. Conversely, on the Bombay Stock Exchange (BSE), it opened lower at Rs. 646.50, reflecting a discount of 0.23%. The overall market response to the ₹3,000 crore public issue was tepid, with shares declining shortly after listing to Rs. 634.45, marking a drop of 2.4% from the opening price.
Investor Participation Falls Short
The IPO garnered limited interest, being subscribed only 1.15 times. This figure highlights the lack of enthusiasm across all investor categories. Qualified Institutional Buyers (QIBs) showed some interest, subscribing 1.79 times, but retail investors participated at only 0.62 times, while Non-Institutional Investors (NIIs) subscribed a mere 0.23 times. The price band for the IPO was set between Rs. 615 and Rs. 648 per share, with a lot size of 23 shares, necessitating a minimum investment of Rs. 14,904 at the upper end of the price range. Leading up to the IPO, grey market premiums remained flat at Rs. 0, indicating a lack of speculative interest.
The company secured Rs. 1,348 crore through 67 anchor investors, which include prominent domestic players such as ICICI Prudential, HDFC MF, and Axis MF. Global investors like Goldman Sachs Fund and Allianz Global Investors also participated. However, it is crucial to note that this IPO was entirely an Offer for Sale (OFS), meaning that the proceeds will benefit existing shareholders such as Embassy Buildcon LLP and 1 Ariel Way Tenant, a subsidiary of WeWork Global.
Governance Concerns Affect Market Confidence
Investor hesitance was largely attributed to ongoing legal issues surrounding the promoter, who is a respondent in a case related to the Prevention of Money Laundering Act (PMLA), initially filed in 2014. Although the judiciary allowed the IPO to proceed, the lingering legal troubles have contributed to diminished market confidence, resulting in hesitant investor enthusiasm.
WeWork India operates a diverse portfolio of flexible workspaces across major cities, catering to businesses, startups, and freelancers. As of the financial year ending March 2025, the company managed 7.67 million square feet of leasable area, reporting revenues of Rs. 19,492 crore, a year-on-year increase of 17.06%. Over the last two financial years, the company’s revenue surged by nearly 48%, bolstered by the growing acceptance of flexible workspace models.
Despite the promising fundamentals in India’s co-working sector, analysts remain cautious about WeWork India’s outlook in the short term. The muted market debut and lack of enthusiasm from both retail and institutional investors, alongside ongoing governance concerns, suggest that the company may face ongoing pressures from stock volatility and negative sentiment in the weeks ahead.
