*DRHP Link:* https://www.icicisecurities.com/Upload/ArticleAttachments/Awfis%20Space%20Solutions%20Limited%20DRHP.pdf
Awfis Space Solutions Limited has filed its Draft Red Herring Prospectus (“DRHP”) with market regulator Securities and Exchange Board of India (“SEBI”). As of June 30, 2023, Awfis holds the position of the largest flexible workspace solutions company in India, based on the total number of centers, according to a CBRE Report.
The Company’s initial public offering comprises a fresh issue of up to ₹1600 million and an offer for sale of equity shares of up to 10,023,172 equity shares.
The offer for sale comprising up to 5,011,586 equity shares by Peak XV Partners Investments V (formerly known as SCI Investments v) (“Peak XV” or the “promoter selling shareholder”), up to 4,936,412 equity shares aggregating by Bisque Limited and up to 75,174 equity shares by Link Investment Trust.
The company proposes to utilize the Net Proceeds from the offer towards Funding capital expenditure towards establishment of new centers, funding for the working capital requirements, and general corporate purposes.
ICICI Securities Limited, Axis Capital Limited, IIFL Securities, Emkay Global Financial Services Limited are the Book Running Lead Managers to the issue.
Evolving from a co-working space, Awfis has transformed into an integrated workspace solutions platform, with its core offering encompassing flex workspaces, customized office spaces, and mobility solutions. In addition to co-working solutions, Awfis has developed capabilities in design, construction, maintenance, and management of flexible workspace requirements, exemplified by Awfis Transform and Awfis Care. The company also provides allied services, including food and beverages, IT support, and infrastructure services such as storage and customization, along with event hosting and meeting arrangements.
Awfis offers a comprehensive range of flexible workspace solutions, catering to diverse needs, from individual flexible desk requirements to customized office spaces for start-ups, SMEs, and large corporations. The company’s flexible workspace solutions cover various seat cohorts, ranging from a single seat to multiple seats, available for clients to contract for durations spanning one hour to several years.
The company is ranked 1st among the top 5 benchmarked players in the flexible workspace segment and has a presence in 16 cities across India. Additionally, Awfis is present in the maximum number of micro-markets in India. With 136 total centers in 16 cities, Awfis provides a total of 81,433 seats, covering a chargeable area of 4.12 million sq. ft. Among these, 15 centers with 11,191 seats are currently under fit-out, with a chargeable area aggregating to 0.53 million sq. ft. (Source: CBRE Report).
The Managed Aggregation (MA) model is more collaborative in nature, wherein Awfis space owners become a stakeholder in the center by co-investing in the fit-out infrastructure. The developers or space owners typically incur capital expenditure on fit-out, in part or full, the remainder being borne by the operator, if any, depending on other terms of the MA model, often foregoing a fixed rental for a component of Minimum Guarantee (MG) on a case-to-case basis and may take up a share of the revenue/profit on pre-negotiated terms. Most of their MA arrangements are structured on a profit or revenue sharing model due to the risk of capital being largely borne by the space owner. Over the years, Awfis has increased their focus on the lower-risk, asset light MA model and as of June 30, 2023, 64.96% of their centers are under the MA model, based on total seats.
Awfis’s Platform Approach strategy spans the major facets of modern workspace requirements, i.e., through backward integration with Awfis Transform by offering design and build services to clients and through forward integration with Awfis Care by providing facility management services on behalf of space owners. This integrated platform strategy provides a network effect, wherein each segment not only serves its primary clientele but also complements Awfis’s other segments. As a result, Awfis’s clients and space owners are introduced to their wider ecosystem, thereby enhancing retention and driving cross-selling opportunities. The Awfis ecosystem caters to differentiated client needs to provide unmatched ease to the clients. The synergy among these provides their clients and space owners a seamless experience.
