India’s leading managed office space provider, Smartworks Coworking Spaces Ltd, has successfully raised ₹173.64 crore from anchor investors just ahead of its IPO opening on July 10, 2025. This anchor round was subscribed at the upper IPO price band of ₹407 per share, accounting for 42.66 lakh equity shares.
Top investment firms including Tata Mutual Fund, Baroda BNP Paribas, and Aditya Birla Sun Life were among the major backers, signaling strong institutional confidence in Smartworks’ long-term prospects.
I. Strong market sentiment and IPO valuation
This pre-IPO fundraise is part of Smartworks’ broader plan to raise ₹583 crore through the IPO, ₹445 crore from fresh issuance and ₹137.6 crore via Offer-for-Sale (OFS). Activity in the grey market indicates a premium of ₹30 to 33 per share, suggesting an expected listing valuation of ₹4,640 to ₹4,800 crore.
This positions Smartworks as a serious competitor to already-listed peers like Awfis, which holds a similar market cap. The enthusiastic anchor participation reflects broader investor confidence in India’s fast-growing coworking and commercial real estate sector.
II. Real estate is at the core of Smartworks’ business model
While Smartworks is widely recognized for its tech-enabled coworking solutions, its foundation lies firmly in commercial real estate. As of April 2025, the company has:
• 8.31 million sq. ft. of operational space
• 0.7 million sq. ft. under fit-out
• 1.7 million sq. ft. under finalized leases

Figure 1. Units of spaces (million sq. ft.) with Smartworks as of 2025

This brings its total pipeline to over 10 million sq. ft., making it one of the largest flexible workspace operators in India.
What sets Smartworks apart is its cost-efficient fit-out model, which reduces expenses by up to 50% compared to other providers. This gives it a unique edge in delivering affordable, high-quality office spaces to enterprise clients.
III. Financial performance: rapid growth.  
Smartworks has shown remarkable revenue growth over the past two years:

Figure 2. ~Revenue growth of SW over 2 years (in crores)
• FY23 Revenue: ₹711 crore
• FY25 Revenue: ₹1,374 crore
• Revenue CAGR: ~39%
Its Adjusted EBITDA also surged from ₹36 crore to ₹172 crore—reflecting a 117% CAGR. However, high upfront capital expenditures for leasing and development often delay profitability. Smartworks intends on using ₹114 crore from its IPO to reduce debt, and ₹225 crore to expand and fit out new centres, a move expected to enhance long-term returns.
IV. Geographic footprint and revenue concentration
• Smartworks currently operates 48 centres across 15 Indian cities

• Offers nearly 1.9 lakh workstations.

• A significant 33% of its revenue comes from Pune, highlighting a potential geographic concentration risk.
• To maintain growth momentum and reduce exposure, Smartworks must continue diversifying across Tier-1 and Tier-2 cities, where demand for managed office spaces is on the rise.
V. Why Smartworks matters for India’s real estate sector?
Smartworks’ IPO and anchor investor support underscore a low message: coworking is no longer just a tech story; it’s a real estate evolution.

Key takeaways include:
• Institutional confidence in managed commercial spaces
• Real estate scale as a growth driver
• Capex-intensive but margin-improving business model
• Emergence of coworking as an investable real estate asset class

VI. Real estate implication

• Strong demand for commercial real estate: The enthusiastic response from institutional investors suggests growing confidence in the commercial real estate market. As more companies adopt flexible office models, firms like Smartworks are benefiting from their unique position at the crossroads of workspace solutions and property investment. This shift shows that coworking is no longer just a startup trend, it’s a core part of modern corporate infrastructure.

• A capital-heavy business with long-term potential: Raising over ₹170 crore highlights the capital-intensive nature of the coworking business. Setting up office spaces involves major upfront costs—like leasing properties, interior fit-outs, and security deposits. However, these investments are essential to create scalable, long-term revenue. Once established, these centres generate a steady income through leases and service offerings, making them valuable real estate assets.

• A benchmark for real estate valuation: With a post-IPO valuation projected around ₹4,600 crore for a 10 million sq. ft. portfolio, Smartworks sets a benchmark of roughly ₹4,600 per sq. ft. for developed office space. This is a useful reference point for investors and analysts evaluating other players in the commercial real estate or coworking space, helping them gauge potential returns and compare valuations.

• Coworking industry gaining scale and maturity: With Smartworks clocking nearly 39% annual revenue growth, and peers like Awfis achieving profitability, it’s clear that the coworking sector is maturing. These players prove that flexible workspaces can scale efficiently when backed by strategic real estate investments. It signals a shift from early experimentation to sustainable, growth-driven business models within the industry.

To conclude, Smartworks is at the Intersection of Coworking and Commercial Real Estate
The ₹173.64 crore raised by Smartworks from anchor investors is more than just an IPO milestone, it’s a reflection of the growing institutional belief in India’s real estate-backed coworking industry. With its vast footprint, cost-efficient model, and strong growth trajectory, Smartworks is well-positioned to lead this sector.
However, success post-IPO will depend on how the company navigates challenges such as geographic concentration, delayed profitability, and scaling sustainably in a competitive real estate market.

*Source: JLL Primary Research

Author: Sumedha Das