WeWork India's IPO sounds a bit too familiar

Thomson Reuters

30/07/2025 04:26

The author is a Reuters Breakingviews columnist.  The opinions expressed are her own.

By Ujjaini  Dutta

BENGALURU, July 30 (Reuters Breakingviews) - WeWork’s latest push for an initial public offering sounds a bit too familiar. The coworking space’s India affiliate is preparing for a Mumbai share sale. It has improved on the business model of its global namesake which commanded a $47 billion valuation before scrapping its planned IPO in 2019. Nonetheless, it looks like another rushed attempt at a stock market listing from the brand.

As a separate entity, WeWork India was unscathed by WeWork Global's entry into bankruptcy proceedings in 2023. It counts the company as a minority investor and pays it a management fee, recently renegotiated down to 2.84% of revenue. Embassy Group, a Bengaluru-based developer, owns 74% of the firm.

The franchisee stands apart in other ways, too. For a start, it is profitable. WeWork Global was racking up billions of dollars of losses ahead of its IPO push. By contrast, WeWork India turned a small net profit in the six months to September 2024.

The franchisee's business looks more disciplined too. Its centres are in top cities like Bengaluru where demand has kept occupancy rates well over 80%, according to property consultancy Knight Frank. Its tenants include JP Morgan JPM.N and Thomson Reuters TRI.TO, the parent of Reuters Breakingviews.

And the company is experimenting with ways to reduce costs: in three of its 59 centres, landlords cover operating and setup costs for a cut of the revenue; another five run on fixed-fee services. The relationship with Embassy Group, also a partner to Blackstone BX.N, makes it easier for WeWork India to access prime office real estate too.

On a multiple of 3.65 times 2026 sales, the same as Peak XV Partners-backed local rival Awfis Space Solutions AWFI.NS, WeWork India’s enterprise might be worth $814 million. Yet that would be nearly double the valuation that was mooted in local media in April last year, and about twice the multiple of London-listed International Workplace Group IWG.L which has over 4,000 workspace locations globally.

WeWork India is also going public in what looks like an increasingly crowded market. The Executive Centre, backed by KKR KKR.N, is preparing to list, too. Smartworks Coworking Spaces SMAW.NS debuted earlier this month. What's more, none of the proceeds from the global brand's potential $400 million offer will go to the company: it's just an opportunity for existing investors to cash out. Given the difficult history of the brand, WeWork India should have delayed its IPO until it proved itself a bit more.

Follow Ujjaini Dutta on LinkedIn and X.

CONTEXT NEWS

WeWork India has begun marketing its initial public offering, which is expected to raise as much as 35 billion rupees ($407 million), Bloomberg reported on July 17, citing people familiar with the matter. The coworking space provider aims to launch the deal in August.

The company is owned by Indian real estate firm Embassy Group and 1 Ariel Way Tenant, an affiliate of WeWork Global. The offering will be comprised entirely of existing shares, according to WeWork India's prospectus.

WeWork India has only just started to generate a net profit https://www.reuters.com/graphics/BRV-BRV/znpnnxmompl/chart.png

(Editing by Una Galani; Production by Aditya Srivastsav)

((For previous columns by the author, Reuters customers can click on DUTTA/ujjaini.dutta@thomsonreuters.com))