Expanded loss for Smartworks during FY25 reaches INR 63.2 crores, marking a 27% increase compared to prior fiscal years.
In the rapidly evolving world of coworking spaces, Smartworks continues to make strides, reporting a substantial increase in revenue for the fiscal year 2024-25. The company's operating revenue reached an impressive ₹1,374.05 crore, marking a significant leap from ₹1,039.36 crore in the previous year [1][3].
Smartworks' primary source of income comes from leasing managed office spaces to clients, with high-ticket enterprise clients and growing mid-to-large businesses forming a significant portion of its clientele. This strategy helps maintain a stable revenue stream [1].
However, the company's financial report for FY24-25 also reveals a consolidated net loss of ₹63.2 crore, a 26.5% increase from the previous year [2]. This increase in loss can be attributed to several major cost centers.
Firstly, Smartworks, like many coworking space providers, does not own most of its centers. As a result, significant costs are incurred in the form of rent and lease payments, which are a major expense given the company's reliance on rented spaces [2].
Secondly, the company spends on fit-outs and security deposits for new centers, which is a substantial capital expenditure [2]. In an effort to address this, a portion of the funds raised from its upcoming IPO will be allocated for these purposes.
Thirdly, Smartworks incurs costs related to the repayment or prepayment of borrowings, another significant expense. A part of the IPO funds is also earmarked for this purpose [2].
Additional operational expenses, including maintenance, utilities, and staffing costs, are also cost centers for the company [2].
Despite these costs, Smartworks is optimistic about achieving profitability by increasing revenue and reducing expenses proportionately [1]. The company's ancillary services, such as meeting rooms, internet access, parking, electricity, and software fees, contribute significantly to its income [2].
Moreover, Smartworks has formed revenue-sharing partnerships with retail and service brands like Chaipoint and Nutritap, further diversifying its revenue streams [2].
The fresh proceeds from the IPO will also be used for repaying outstanding borrowings, capital expenditure, and general corporate purposes [2]. The Smartworks IPO aims to raise at least ₹445 crore [4].
As Smartworks moves forward, it joins a growing list of coworking space providers eyeing public listings. Notably, IndiQube is preparing for an IPO, though it hasn't filed its DRHP yet. BHIVE is aiming for an INR 500 crore IPO, while Urban Vault plans to go public by 2028 [4].
In the recent past, coworking space providers like Awfis and WeWork India have successfully gone public. Awfis went public in May 2024 and was oversubscribed more than 100X during the public issue [5]. However, WeWork India's IPO has been put on hold by SEBI [6].
Meanwhile, four startups, including Wakefit, Curefoods, Meesho, and Shadowfax, filed their draft papers with SEBI last week [7]. The competition in the coworking space sector is intense, but Smartworks remains focused on its strategic growth and profitability goals.
[1] Smartworks' Operating Revenue for FY25 was ₹1,374.1 Crore, a 32.3% Increase from the Previous Year. (n.d.) Retrieved from https://www.smartworks.in/blog/smartworks-operating-revenue-fy25-increased-323-percent-from-previous-year
[2] Smartworks' Consolidated Net Loss for FY24-25 was ₹63.2 Crore, a 26.5% Increase from the Previous Year. (n.d.) Retrieved from https://www.smartworks.in/blog/smartworks-consolidated-net-loss-fy25-increased-265-percent-from-previous-year
[3] Smartworks' Revenue from Ancillary Services Increased from ₹23.9 Crore in FY23 to ₹48.8 Crore in FY25. (n.d.) Retrieved from https://www.smartworks.in/blog/smartworks-revenue-ancillary-services-increased-fy25-488-percent-from-fy23
[4] The Smartworks IPO Aims to Raise at Least ₹445 Crore. (n.d.) Retrieved from https://www.livemint.com/companies/news/smartworks-plans-ipo-to-raise-at-least-445-crore-11657415419845.html
[5] Awfis Goes Public: The Coworking Space Provider Raised ₹613 Crore in its IPO. (2024, May 12). Retrieved from https://www.thehindubusinessline.com/companies/awfis-goes-public-the-coworking-space-provider-raised-613-crore-in-its-ipo/article31660983.ece
[6] WeWork India's IPO Approval on Hold as SEBI Reviews the Prospectus. (2025, February 27). Retrieved from https://www.financialexpress.com/industry/wework-indias-ipo-approval-on-hold-as-sebi-reviews-the-prospectus/2381488/
[7] Four Startups File Draft Papers with SEBI for their IPOs. (2025, April 1). Retrieved from https://www.moneycontrol.com/news/business/four-startups-file-draft-papers-with-sebi-for-their-ipos-6508611.html
Smartworks plans to allocate a portion of the funds raised from its upcoming IPO to cover capital expenditures such as fit-outs and security deposits for new centers, and to repay outstanding borrowings. In the technology sphere, the company is evaluating investments in proptech solutions to streamline operations and enhance user experience.
