WeWork India IPO: After Three Months, Draft Papers Are Out Of Abeyance

More than three months after being first put on hold, WeWork India Management Ltd.'s initial public offering has been moved out of abeyance.

Despite this, the IPO, as of June 4, is still not cleared, and continues to be under review by the market regulator.

Late in March, the Securities and Exchange Board of India temporarily put the IPO of WeWork India on hold. Without specifying reasons, the regulatory body stated that the "issuance of observations (has been) kept in abeyance."

Following this, NDTV Profit had reported earlier that a months-old case against a former chief executive of Embassy Office Parks REIT might have been the reason why WeWork's market debut was put on hold.

The REIT, NDTV Profit had learnt, was working with the Securities and Exchange Board of India to address the issues, with the IPO set to get cleared once an internal resolution was reached.

The Embassy-backed workspace operator had filed draft papers for a market debut through a pure offer-for-sale in February. Embassy Buildcon LLP and WeWork Global affiliate 1 Ariel Way Tenant Ltd. will be offloading up to 4.4 crore shares through the IPO.

Currently, promoter Embassy Buildcon holds a 73.8% stake in the company, while shareholder 1 Ariel holds 22.7% on a fully diluted basis. The average cost of acquisition for Embassy and 1 Ariel stood at Rs 161.83 and Rs 65.88 per share, respectively.

Since this is a pure OFS, the company will not get any funds from the IPO.

JM Financial Ltd., ICICI Securities Ltd., Jefferies India Pvt., Kotak Mahindra Capital Co., and 360 ONE WAM Ltd. are appointed as the lead bankers for the offer.

Launched in 2017 by its then Adam Neumann-led beleaguered parent, WeWork India started out through a partnership with CEO Karan Virwani's Embassy Group. As of Sept. 30, 2024, the company's portfolio comprised 94,440 desks across 59 operational centres in eight cities.

The company's tenants include Amazon Web Services, JP Morgan Services, Deutsche Telekom and Grant Thornton Bharat.

In June 2024, India's competition regulator had cleared WeWork Inc.'s exit from the Indian entity via a sale to Real Trustee Advisory Company. The two-step process cleared the way for a change in the ownership structure of the Indian coworking space operator.

Awfis Space Solutions Ltd., and listing-bound Smartworks Coworking Spaces will be the listed peers that WeWork India will be competing against once it debuts on the bourses.