Two days after WeWork India Management Ltd launched its much-awaited initial public offering (IPO), governance advisory firm InGovern Research Services has raised red flags over the company’s weak financials, high costs, and lack of transparency in disclosures.
The IPO, aimed at raising around ₹3,000 crore via an Offer for Sale (OFS), will not bring any fresh capital into the company. Instead, proceeds will go entirely to selling shareholders, primarily Embassy Buildcon LLP and WeWork International. Nearly 45% of the issue, worth ₹1,348 crore, has already been picked up by anchor investors at the upper price band of ₹648 per share.
WeWork India, incorporated in 2017, operates flexible office spaces across major cities including Bengaluru, Mumbai, Delhi NCR, Pune, and Hyderabad under a long-term licence agreement with WeWork Global. While the company has seen revenue grow at a compounded annual growth rate (CAGR) of 22% between FY23 and FY25, InGovern points out that this growth has come with continued financial stress.
According to InGovern’s analysis, the company has consistently reported negative cash flows, and lease costs account for over 43% of its revenues—indicating a heavy cost burden. The reported profit in FY25 is largely attributed to a deferred tax credit, rather than actual operational profitability.
The advisory firm also highlighted governance concerns, particularly regarding promoter share pledges. A significant portion of shares held by Embassy Buildcon was pledged pre-IPO for borrowings. Although these shares have since been released, they are required to be repledged if there is a delay in the IPO listing, potentially impacting promoter control and raising investor concerns.
These observations suggest that while WeWork India presents a strong growth story in the co-working space, it also carries substantial financial and governance risks. Investors are advised to weigh these concerns carefully before making investment decisions related to the IPO.
The IPO, aimed at raising around ₹3,000 crore via an Offer for Sale (OFS), will not bring any fresh capital into the company. Instead, proceeds will go entirely to selling shareholders, primarily Embassy Buildcon LLP and WeWork International. Nearly 45% of the issue, worth ₹1,348 crore, has already been picked up by anchor investors at the upper price band of ₹648 per share.
WeWork India, incorporated in 2017, operates flexible office spaces across major cities including Bengaluru, Mumbai, Delhi NCR, Pune, and Hyderabad under a long-term licence agreement with WeWork Global. While the company has seen revenue grow at a compounded annual growth rate (CAGR) of 22% between FY23 and FY25, InGovern points out that this growth has come with continued financial stress.
According to InGovern’s analysis, the company has consistently reported negative cash flows, and lease costs account for over 43% of its revenues—indicating a heavy cost burden. The reported profit in FY25 is largely attributed to a deferred tax credit, rather than actual operational profitability.
The advisory firm also highlighted governance concerns, particularly regarding promoter share pledges. A significant portion of shares held by Embassy Buildcon was pledged pre-IPO for borrowings. Although these shares have since been released, they are required to be repledged if there is a delay in the IPO listing, potentially impacting promoter control and raising investor concerns.
These observations suggest that while WeWork India presents a strong growth story in the co-working space, it also carries substantial financial and governance risks. Investors are advised to weigh these concerns carefully before making investment decisions related to the IPO.
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