Awfis Space Solutions IPO: The initial public offering (IPO) of workspace solutions provider Awfis Space Solutions has been receiving strong demand from investors as the issue has been oversubscribed.
The company plans to raise ₹598.93 crore from the issue. The bidding for Awfis Space Solutions IPO commenced on May 22 and will conclude on May 27.
Awfis Space Solutions is the largest flexible workspace solutions company in India as of 9MFY24 providing solutions to small and medium enterprises (SMEs), based on the total number of centers.
Let us check Awfis Space Solutions IPO GMP today, subscription status and review.
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Awfis Space Solutions IPO GMP
Awfis Space Solutions IPO GMP today, or grey market premium today, is ₹100 per share, as per stock market observers. This indicates that the equity shares of Awfis Space Solutions are trading higher by ₹100, or at a premium of 26.11% to the issue price at ₹483 apiece in the grey market.
Awfis Space Solutions IPO Subscription Status
Awfis Space Solutions IPO has been subscribed 4.27 times so far till Thursday, the second day of the bidding process.
The IPO has been subscribed 12.25 times in the retail category, 6.81 times in the Non Institutional Investors (NII) category and 32% in Qualified Institutional Buyers (QIBs) category so far.
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Awfis Space Solutions IPO Details
Awfis Space Solutions IPO opened for subscription on Wednesday, May 22 and will close on Monday, May 27. The IPO allotment is expected to be finalized on May 28, and the IPO listing will take place on May 30 on both the stock exchanges, BSE and NSE.
The ₹598.93 crore worth Awfis Space Solutions IPO is a combination of fresh issue of 33 lakh equity shares aggregating to ₹128 crore and offer for sale (OFS) of 1.23 crore shares worth ₹470.93 crore.
Awfis Space Solutions IPO price band is fixed at ₹364 to ₹383 per share. The IPO lot size is 39 shares. The issue includes a reservation of up to 57,636 shares for employees and the company has offered at a discount of ₹36.
ICICI Securities, Axis Capital, IIFL Securities and Emkay Global Financial Services Ltd are the book running lead managers of the Awfis Space Solutions IPO, while Bigshare Services Pvt Ltd is the IPO registrar.
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Should you subscribe to Awfis Space Solutions IPO?
While most analysts have recommended subscribing to the Awfis Space Solutions IPO, some have raised concerns over the persistent losses reported by the company.
Brokerage firm Anand Rathi said that the company has a Price to Sales ratio of 4.9x of its FY23 earnings. It has shifted to an asset light model which will show benefits in the coming time period.
“The company has a large Total Addressable Market (TAM) driven by factors such as enterprise focus on flexibility, cost optimization, workforce fluidity, reverse migration, workplace evolution, focus on wellness, facilities, and amenities, as well as growth of start-ups in Tier 1 and Tier 2 cities,” Anand Rathi said.
Looking at these factors, it recommends a “Subscribe – Long Term” rating to the IPO.
Master Capital Services recommends investing in Awfis Space Solutions IPO for listing gains.
“Awfis Solutions plans on continuing to build an industry leading capital efficient model in order to keep hold of the market share and increase the percentage of operational centers and seats under the MA model. The company also intends to expand in new and existing markets by evaluating potential locations and cities based on multiple criteria. But the company has incurred losses in the past financial years. Investors looking to invest can invest for listing gains,” it said.
However, Tarun Singh, MD, Highbrow Securities believes Awfis Space Solutions Ltd’s IPO raises concerns for discerning investors. The company’s claims of market leadership and diverse offerings are overshadowed by persistent financial issues, he said.
“Despite revenue growth, the company has registered net losses of ₹42.64 crore in FY21, ₹57.16 crore in FY22, and ₹46.67 crore in FY23. Negative EPS and a poor RoNW highlight these financial challenges. Promises of turning cash-positive next fiscal year appear questionable given the company’s ongoing unprofitability. Management’s optimistic projections contrast with the company’s historical financial struggles,” Sing said.
Further the IPO structure itself is concerning: only ₹128 crore in fresh equity shares is being issued, while ₹470.93 crore is allocated for an Offer for Sale (OFS). This raises doubts about the intentions behind the IPO, suggesting insiders may be looking to exit. I think this IPO presents a risk the investors should critically assess, he added.
On the bright side, according to Singh, the flexible workspace sector is set for fast growth, driven by changing work habits, tech advancements, fiscal discipline, and sustainability.
