Awfis Space Solutions Ltd IPO: Get Date, Price, Review and Details

About- Awfis Space Solutions Ltd:

Awfis Space Solutions Ltd. is the largest flexible workspace solutions company in India as on December 31, 2023, based on total number of centers. The company provides a wide spectrum of flexible workspace solutions ranging from individual flexible desk needs to customized office spaces for start-ups, small and medium enterprises (“SMEs”) as well as for large corporates and multi-national corporations. Over time, the company has evolved from a co-working space to an integrated workspace solutions platform. While the core solution is co-working solutions which includes flex workspaces, customized office spaces and mobility solutions, it has built capabilities to design, build, maintain and manage a wide range of flexible workspace requirements such as Awfis Transform (the construction and fit-out services business segment) and Awfis Care (the facility management services business segment). It also provides allied services ranging from food and beverages, information technology support services and infrastructure services such as storage and customization to event hosting and meeting arrangements.

Awfis Space Solutions Ltd IPO Details:

Objects of the Offer:

The company intends to utilize the net proceeds towards the following objects:

• Funding capital expenditure towards the establishment of new centres;
• Funding the working capital requirements and
• General corporate purposes

Key Strengths and Opportunities:

• Leadership in a large and growing marketplace: The total addressable market for the flexible workspace operators represents a sizeable opportunity of 282 million sq. ft. (in terms of area) and ₹ 474-592 billion (in terms of value) by 2026. As Awfis Space Solutions Ltd. is the largest flexible workspace solutions company in India as on December 31, 2023, based on total number of centers, it is well-positioned to benefit and capture this growth in the flexible workspace segment. As on December 31, 2023, it is ranked 1st among the top 5 benchmarked players in the flexible workspace segment with a presence in 16 cities in India.
• Innovating in the flexible workspace industry with the adoption of MA model: Awfis has reimagined workspace sourcing strategy with its distinctive MA model, and it is a paradigm shift in the conventional coworking industry. The MA model continues to be a key part of its supply strategy and it has increased the percentage of operational seats under the MA model from 46.37%, in Fiscal 2021 to 57.66% in Fiscal 2023. Further, as of December 31, 2023, 66.43% of the total seats are under the MA model, including seats that are under fit-out. Awfis has the largest number of centers under the MA model among the organized flexible workspace players in India as of December 31, 2023.
• Delivering strong financial and operating metrics: From Fiscal 2021 to Fiscal 2023, the revenue from contracts with customers has grown at a CAGR of 74.85% from ₹1,783.60 million to ₹5,452.82 million, and its total income has increased at a CAGR of 61.84% from ₹2,160.20 million to ₹5,657.87 million. The cash EBIT has grown by 125.41% from ₹71.16 million in Fiscal 2021 to ₹361.54 million in Fiscal 2023 and the ROCE was 25.26% in Fiscal 2023. Its ROCE increased by 4.59 times from Fiscal 2021 to nine months ended December 31, 2023. This performance has been driven by a focused strategy, differentiated product portfolio and operational efficiency.
• Experienced and diverse senior management team: The founder of Awfis Space Solutions, Amit Ramani has over 20 years of experience in real estate and workspace solutions. Its senior management team is a professional team with a combined experience of 58 years in real estate, leasing, hospitality and sales and marketing businesses. The industry knowledge and leadership of its executive leadership team, combined with their extensive experience, provide it with a competitive advantage, enabling it to attract high-quality talent, drive the implementation of its strategies and achieve the long-term objective of delivering sustainable growth across the business.

Risks:

• Awfis Space Solutions Ltd. has a history of net losses, negative earnings per share and return on net worth. It needs to generate and sustain increased revenues while managing its expenses to achieve profitability, and its inability to achieve these goals may have an adverse effect on the business, results of operations, cash flows and financial condition.
• Awfis has experienced negative cash flows in previous Fiscals and it may continue to have negative cash flows in the future. Negative cash flows over extended periods, or significant negative cash flows in the short term, could materially impact its ability to operate the business and implement growth plans.
• Awfis Space Solutions may not be able to attract new clients in sufficient numbers, continue to retain existing clients, a portion of whom enter into service agreements with short-term commitments, or agree sufficient rates to sustain and increase our client base. Its results of operations could be adversely affected by declines in demand for the flexible workspace solutions.
• The company may incur additional capital expenditure under its MA model to attract new clients and retain existing clients, which may impact its cash flows and profitability. Under the MA model, the split of the capital expenditure is determined upfront between the space owner and Awfis. However, its share of capital expenditure may increase for a number of reasons, including, specific client demands which require it to incur additional expenditure.

Financial Snapshot:

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Conclusion:

Awfis Space Solutions Ltd. provides a wide spectrum of flexible workspace solutions ranging from individual flexible desk needs to customized office spaces for start-ups, small and medium enterprises, large corporates, and multinational corporations. Over time, it has evolved from a co-working space to an integrated workspace solutions platform. Awfis reported healthy top-line growth, yet it reported losses for the Fiscal Years 2021,2022 and 2023 and continued to operate at a loss for the nine months ending December 2023. Awfis Space Solutions operates in a highly competitive environment and is vulnerable to macroeconomic factors. With the adoption of the MA model, there are no listed entities in India or abroad that are comparable with the business of Awfis. As the company is a loss-making company, its PE cannot be calculated. Considering these factors, we advise investors to subscribe to the IPO for listing gains.