Awfis Space Solutions shares list at 14% premium over IPO price

Shares of co-working space start-up Awfis Space Solutions made a solid debut on the stock exchanges on Thursday, with the share price listing at 13.6% premium, in an otherwise weak broader market. The stock of Awfis debuted at ₹435 on the NSE, against the issue price of ₹383 per equity share. On the BSE, the shares opened at ₹432.25 apiece, up 12.85% over the IPO price.

Post listing, Awfis shares rose as much as 17.9% to ₹451.45 level, while the market capitalisation climbed to ₹3,115 crore. Meanwhile, the BSE Sensex was trading lower by 416 points, or 0.56%, at 74,086, and the NSE was down 134 points, or 0.59%, at 22,571 level.

The debut of Awfis Space was below Street expectations as the stock was commanding a grey market premium (GMP) of ₹84 over the issue price in the unofficial market, signaling listing to be around ₹467 per share, up 21.9%. In the last ten days, Indegene GMP has declined nealry 50% from ₹165 on May 20 amid volatility in the market ahead of Lok Sabha Elections results.

Shivani Nyati, Head of Wealth, Swastika Investmart, says the pre-listing GMP suggested a potentially higher listing gain, but it gradually declined in the days leading up to the listing, possibly reflecting a more cautious investor approach.

“While not explosive, Awfis Space Solutions' listing presents a decent starting point. The strong subscription highlights the attractiveness of the co-working space market, but the company's financial situation requires ongoing monitoring,” says Nyati.

She suggested investors to “hold” their position by keeping a stop loss at the issue price.

Mehta Equities, in its pre-listing view, had said that considering the strong subscription demand, there was a good room for healthy listing gain in the range of 25-30% against the issue price. “We continue to recommend allotted investors to book profits on listing day eyeing the volatility in the market momentum,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.

Awfis Space IPO booked 108 times

The ₹599-crore IPO of the Delhi-based space solutions company received an overwhelming response from investors, with the issue subscribing 108.17 times as it received bids for 93.34 crore shares worth ₹ 35,750.5 crore against the issue size of 86.29 lakh stocks. The four-day issue was subscribed 2.07 times on Day 1 (May 22), followed by 4.33 times on Day 2, 11.45 times on Day 3, and 108.17 times on the last day (May 27).

The co-working space start-up garnered strong response from all three segments of investors, particularly from qualified institutional buyers (QIB) and non-institutional investors (NII). The IPO was booked 116.95 times in QIB category, 129.27 times in NII segment, and 53.23 times in retail segment. The portion reserved for employees was subscribed 24.68 times. Awfis had reserved 75% of the issue for QIB, 15% for NII, and the remaining 10% for retail investors, including employees.

The IPO comprised fresh issue of shares worth ₹128 crore and an offer for sale (OFS) of shares aggregating to ₹470.93 crore by existing shareholders. The price band for the public offering was set in the range of ₹364-383 per equity share and the lot size was 39 equity shares and in multiples thereafter.

The company intends to use capital raised from the issuance of fresh equities for funding capital expenditure towards the establishment of new centres. A part of the fund will be also used to meet working capital requirements and general corporate purposes.

Established in December 2014, the co-working space company provides a wide spectrum of flexible workspace solutions ranging from individual flexible desk needs to customised office spaces for startups, small and medium enterprises as well as for large corporates and multi-national corporations. For the financial year 2023-24, Awfis posted net loss of ₹46.64 crore compared to loss of ₹57.16 crore in FY22 and ₹42.64 crore in FY21. The revenue, however, nearly doubled to ₹565.79 crore from ₹278.72 crore in FY22 and ₹216.02 crore in FY21. As of March 31, 2023, the total assets stood at ₹930.61 crore, while net worth was ₹169.36 crore.

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