Management

• Atul Gautam (Chairman and Non-Executive Director),
• Neetish Sarda (Managing Director),
• Harsh Binani (Executive Director),
• V K Subburaj (Independent Director),
• Rajeev Rishi (Independent Director),
• Pushpa Mishra (Independent Director),
• Ho Kiam Kheong (Non-Executive Nominee Director),
• Punam Dargar (Company Secretary and Compliance Officer),
• Pratik Ravindra Agarwal (Chief Business Officer),
• Prashant Hakim (Chief Operating Officer),
• Anirudh Tapuriah (Chief of Strategy and Investor Relations),
• Gokul Nolambur Rajasekar (Group Chief Technology Officer), 
• Kalpana Devnani (Chief Human Resources Officer)
• Sahil Jain (Chief Financial Officer)

Use of Proceeds

The total issue size is Rs. 582.56 crs, which comprises a fresh issue of 445 crs and offer for sale of 137.56 crs. The company intends to utilize a portion of the Net Proceeds towards repayment/ prepayment/ redemption, in full or in part, of certain borrowings availed by the company (114 crs), capital expenditure for fit-outs in the new centres and security deposits of the new centers (225.84 crs) and rest for general corporate purposes.

Competitive Strengths

Market Leadership and Pan-India Scale As of March 31, 2024, the company was the largest managed campus operator among benchmarked peers, with a lease-signed portfolio of 8.0 million square feet (Source: CBRE Report). As of March 31, 2025, the total super built-up area (SBA) under management reached 8.99 million square feet across 50 Centres in 15 cities, including Bengaluru, Pune, Hyderabad, Gurugram, Mumbai, Noida, and Chennai, with 203,118 Capacity Seats. The portfolio includes four centres in India, exceeding 0.5 million square feet, with the largest being approximately 0.7 million square feet at Vaishnavi Tech Park, Sarjapur, ORR, Bengaluru (Source: CBRE Report).

Rapid Growth, Strong Branding and Cluster Strategy The company’s nationwide presence, value-centric pricing, and focus on leasing entire or large properties make it an ideal partner for mid-to-large enterprises. From March 31, 2023, to March 31, 2025, SBA under management grew at a CAGR of 20.80%, while revenue from operations grew at a CAGR of 38.98%. Over eight years, the ‘Smartworks’ brand has gained pan-India recognition, benefiting from an early-mover advantage in managed office solutions. As of March 31, 2025, operations extended to 14 Indian cities and Singapore, covering 19 of 28 key clusters across Tier 1 cities, which account for 94.37% of managed SBA.

Campus Model, Amenities, and Facility Operations The company’s focus on entire/large property leases enables the development of amenity-rich, branded Campuses. Vaishnavi Tech Park in Bengaluru surpasses others like M-Agile (0.69 million sq ft) and AP-81 (0.55 million sq ft) in Pune. Campuses are designed for economies of scale, higher efficiency, and lower costs, incorporating features such as cafeterias, gyms, crèches, convenience stores, and medical centres. These elements promote employee well-being and a collaborative culture. Facility management and building operations are handled by TalbotForce, which operates an integrated management system to ensure consistent quality and service delivery across all Centres.

Client Focus, Cost Efficiency, and Financial Model The company caters to clients ranging from under 50 to over 6,300 Seats, with emphasis on mid-to-large enterprises. Large client deals include over 6,300 Seats in FY25, 4,800 in FY24, and 3,500 in FY23. Standardised designs, modular fit-outs, economies of scale, and proprietary technology allow delivery of cost-effective, customised office solutions. Capital investment for workspace build-out is borne by the operator, helping clients avoid upfront costs and redirect funds to core activities. As of March 31, 2025, the average build-out cost was ₹1,350/sq ft, and the monthly Centre operation cost ranged ₹34–36/sq ft, below industry benchmarks (Source: CBRE Report).

Capital Efficiency and Risk Mitigation Strategy The company’s payback period for capital invested at the Centre level is shorter than the industry average. While the typical operator takes 51–52 months from the fit-out commencement and 45–46 months from the start of operations to recover investments (Source: CBRE Report), the company achieves an average payback of 30–32 months for mature Centres as of March 31, 2025. This is enabled by an efficient financial model that reduces equity deployment for capex and working capital. Customer deposits are used to partially fund fit-outs, and long-term contracts with large enterprise clients support lease rental discounting at competitive rates from financial institutions.

Peer Comparison

Key Risks & Concerns

Geographic Concentration Risk In Fiscal 2025, 75.19% of rental income was generated from Centres located in Pune, Bengaluru, Hyderabad, and Mumbai. A heavy reliance on these cities means that any negative developments in these locations—such as regulatory changes, local economic downturns, or disruptions—could impact the overall business, operational performance, and financial condition.

Client Dependency and Negotiation Risk The business primarily serves clients with requirements of over 300 Seats spread across multiple Centres and cities. These large clients may hold stronger negotiating power, and replacing them could be challenging if agreements are terminated. Such scenarios may negatively affect revenue, cash flows, and overall financial performance.

Site Selection and Sourcing Risk The success of the business depends significantly on identifying and securing suitable properties in the right locations at favourable rental and commercial terms. Inability to do so may hinder operations, reduce profitability, and negatively affect cash flow and financial results. Careful site selection and competitive deal structuring are critical to sustaining growth and margins.

Outlook and Valuation

Smartworks is emerging as a major force in India’s flexible workspace sector, operating 40 centers across 19 urban clusters with a total super built-up area of 8.48 million sq. ft. The company recorded impressive revenue growth, rising from Rs 711 cr in FY23 to Rs 1,374 cr in FY25. This growth underscores increasing demand for managed office solutions and Smartworks’ ability to scale operations effectively. The company's diversified client base and customized offerings continue to strengthen its market position. As hybrid work trends gain momentum, Smartworks is well-positioned to meet the evolving needs of large enterprises seeking agile, tech-enabled workspaces.

Strategically, Smartworks is expanding beyond Indian metros through technology-driven solutions and international operations. Its Singapore-based subsidiary, Smartworks Space Pte. Ltd., turned profitable in FY25, marking a successful step toward global growth. Additionally, investments in support functions like facility management and tech solutions aim to create a more integrated value proposition for clients. The company’s robust operating cash flow of Rs9,285.16 million in FY25 reflects strong business fundamentals. As demand for end-to-end workspace solutions grows, Smartworks’ multi-vertical strategy, focus on premium locations, and investment in digital platforms provide a strong foundation for long-term success.

Despite revenue growth and strategic expansion, Smartworks continues to face profitability pressures. It posted a net loss of Rs 63 cr in FY25, primarily due to high lease rental expenses, depreciation, and finance costs. Several subsidiaries, including Smartworks Tech Solutions and Stellar Services, remain loss-making, and significant investing outflows raise questions about capital efficiency. The company also faces risks in sourcing high-quality office space on favorable terms, which could impact future margins. The company is valued at an EV/EBITDA multiple of 9.7x, based on the upper price band and post-issue capital. We recommend an AVOID rating for the issue. Considering its scale and potential for growth, investors can monitor the company's performance after listing.