Will Awfis House Options see wholesome itemizing positive factors on Thursday?

Awfis House Options’ shares are anticipated to see round 25-30 % positive factors on their inventory market debut on Could 30, regardless of the corporate being a loss making one and reporting damaging money flows. In keeping with consultants, the sturdy IPO subscription numbers, asset mild enterprise mannequin, wholesome progress prospects, and first mover benefit are some supporting elements for the doubtless itemizing positive factors.

The Rs 599-crore preliminary public providing recorded a whopping 108.56 instances subscription throughout Could 22-27, with buyers shopping for 93.68 crore fairness shares as in opposition to supply dimension of 86.29 lakh fairness shares. Non-institutional buyers bid 129.81 instances the allotted quota, certified institutional consumers 116.95 instances and retail 54.58 instances the portion put aside for them.

The workspace options supplier’s IPO comprised of a contemporary situation of shares value Rs 128 crore, and an offer-for-sale (OFS) of 1.22 crore fairness shares value Rs 470.93 crore on the higher finish of worth band of Rs 364-383 per share.

“We imagine that the itemizing worth for the IPO might be within the vary of Rs 500-520 per share (in opposition to situation worth of Rs 383 per share) primarily based on the asset mild enterprise mannequin and wholesome progress prospects,” Narendra Solanki, Head Basic Analysis – Funding Providers at Anand Rathi Shares and Inventory Brokers mentioned.

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Awfis adopted two differentiated fashions for sourcing and procuring workspaces, specifically the straight lease (SL) mannequin and the managed aggregation (MA) mannequin. It presents co-working options, and enterprise options as a part of house options section, accommodating numerous wants from particular person desks to personalized workplace areas for start-ups, small and medium enterprises (SMEs), giant firms, and multinational corporations. Purchasers can lease these areas for as brief as one hour or so long as a number of years.

It’s ranked first among the many high 5 benchmarked gamers within the versatile workspace section with presence in 16 cities in India. Additional, it’s current within the most variety of micro-markets in India.

It’s asking for a market capitalisation of Rs 2,660 crore on the higher worth band.

“The IPO subscription demand has come on account of its first of its sort companies moving into itemizing house and early mover benefit to seize the buyers alternative. Therefore, it’s indicating a superb room for wholesome itemizing achieve within the vary of 25-30 % in opposition to the difficulty worth of Rs 383 per share,” Prashanth Tapse, Analysis Analyst, Senior VP Analysis at Mehta Equities mentioned.

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He believes the wholesome itemizing is justified on the again of the corporate’s rating no 1 among the many high 5 benchmarked gamers in India within the versatile workspace section.

Regardless of challenges, administration is displaying confidence that the corporate can flip internet money optimistic by the subsequent fiscal 12 months. They anticipate brilliant prospects forward, pushed by the numerous demand and provide hole within the versatile workspace section through which Awfis operates, Tapse mentioned.

Within the gray market, Awfis IPO shares have been buying and selling at round 22-30 % premium over the difficulty worth, the market observers mentioned. The gray market is an unofficial platform for buying and selling in IPO shares until the itemizing.

“Present gray market premium is reflecting some investor curiosity,” Shivani Nyati, Head of Wealth at Swastika Investmart mentioned.

Whereas the excessive subscription suggests investor curiosity within the rising workspace sector, Awfis’ financials necessitate a impartial stance. Actually, the monetary state of affairs warrants warning, she feels. Regardless of spectacular income progress, the corporate struggles with reaching profitability. Damaging money circulation and a extremely aggressive market pose further challenges.

The New Delhi-based firm recorded good efficiency on the topline, however has been posting losses on the bottomline. It reported internet lack of Rs 46.6 crore for the monetary 12 months ended March 2023 as in opposition to Rs 57.2 crore internet loss a 12 months in the past. Income from operations throughout the identical interval elevated by 112 % to Rs 545.3 crore from Rs 257 crore.

Regardless of the online loss, the working efficiency remained sturdy. EBITDA (earnings earlier than curiosity, tax, depreciation and amortisation) grew by 127.7 % on-year to Rs 155.6 crore with margin enlargement of 190 bps at 28.5 % in FY23.

Loss for the 9 months interval ending December 2023 stood at Rs 18.9 crore on income of Rs 616.5 crore.

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