WeWork India Share Price Slides After Muted IPO Debut: Analysts Flag Governance Concerns

The WeWork India IPO had a flat debut on October 10, showing cautious sentiment among investors. The stock listed at Rs. 650 on the NSE, slightly higher by 0.31% compared to its issue price of Rs. 648, while on the BSE it opened lower at Rs. 646.50, a discount of 0.23%.

The Rs. 3,000 crore public issue, which was entirely an Offer for Sale (OFS), failed to excite the market as trading sentiment turned weak shortly after listing. Shares slipped further to Rs. 634.45, down 2.4% from the opening price.

Muted Investor Response

WeWork India's IPO was subscribed to only 1.15 times, which indicated low participation from all categories of investors. The Qualified Institutional Buyers (QIB) subscribed 1.79 times, while retail investors subscribed 0.62 times, and Non-Institutional Investors (NII) only 0.23 times.

The IPO’s price band was set between Rs. 615-Rs. 648 per share, and the lot size was 23 shares, requiring retail investors to invest at least Rs. 14,904 at the upper end of the price band. Ahead of the listing, the grey market premium (GMP) remained flat at Rs. 0.

Anchor Investors and OFS Structure

The company raised Rs. 1,348 crore from a total of 67 anchor investors, including well-known domestic players like ICICI Prudential, HDFC MF, Motilal Oswal MF, Axis MF, as well as insurance giants like SBI General, Kotak Mahindra Life, and Bajaj Allianz Life.

Global investors, including Goldman Sachs Fund, Allianz Global Investors, and Whiteoak Capital, also participated.

However, since the IPO was a complete OFS, the proceeds will go directly to existing shareholders, Embassy Buildcon LLP, and 1 Ariel Way Tenant, a WeWork Global entity.

Legal Proceedings and Governance Concerns

Investor caution was due to ongoing legal proceedings involving the promoter, who is a respondent in the Prevention of Money Laundering Act (PMLA) case, 2002, dating back to 2014.

The judiciary, however, permitted the IPO to take place, but it still harmed market confidence, and hence, the investor enthusiasm was limited.

Company Overview and Financial Performance

WeWork India manages a vast array of flexible workspaces all around the major cities, catering to enterprises, startups, and freelancers. As of FY25, the company managed 7.67 million sq. ft. of leasable area and reported revenues of Rs. 19,492 crore, up 17.06% year-on-year.

The company's revenue has increased by almost 48% last two financial years, supported by the increasing acceptance of flexible workspace models.

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Market Outlook

Even with WeWork India’s solid brand and impressive revenue growth, analysts retain a cautious view in the near term due to the muted listing, a lack of enthusiasm from retail and institutional investors, and concerns over corporate governance.

While the company’s fundamentals in India’s co-working sector appear sound, the company might face continued pressure from stock volatility and negative sentiment in the coming weeks.