After purchase, Embassy Group wants to go public with WeWork India.

Photo-AFP

The Embassy Group, headquartered in Bengaluru, is poised to take a significant step in the Indian real estate market by listing WeWork India, a coworking office platform, on domestic stock exchanges. This move comes following the acquisition of a 27% stake in WeWork India from its US-based parent company, WeWork, for approximately ₹700 crore. With plans to list WeWork India within 18 months of the acquisition, the Embassy Group is set to become the sole owner of the Indian entity, having bought out the remaining stake. As part of the deal, Embassy Group intends to sell a 40% stake in WeWork India to Enam Group, A91 Partners, CaratLane founder Mithun Sacheti, and other investors for ₹1,200 crore. Following this divestment, Embassy Group will retain a 60% stake in WeWork India, including 5% allocated for Employee Stock Ownership Plans (Esops), before proceeding with the initial public offering (IPO) process.

According to sources familiar with the matter, WeWork India has been performing exceptionally well in terms of both revenue and profitability, setting the stage for its public debut. The company is poised for further growth and aims to initiate the IPO process by the end of the current year. However, both the acquisition and IPO require regulatory approvals from the Competition Commission of India (CCI) and the Reserve Bank of India (RBI).

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The transaction involves WeWork making a complete exit, while WeWork India retains the brand by paying a franchise fee of approximately 2% to its global parent company. WeWork India declined to comment on queries regarding these developments. Reports initially surfaced on November 14 about WeWork India's plans to repurchase the stake held by WeWork following the latter's Chapter 11 bankruptcy filing in the United States in October.

WeWork India, a rapidly expanding affiliate of WeWork outside the US, has set ambitious revenue targets, aiming for ₹1,800 crore for the fiscal year ended March 31. The company has reported impressive financial performance, with revenue growing by 40% year-on-year to ₹831 crore in the first six months of FY24. Additionally, its earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by 90% to ₹532 crore during the same period, based on the latest available data.

Looking ahead, WeWork India plans to continue its aggressive expansion strategy, targeting an annual addition of 1.5-2 million square feet of office space across seven cities and 54 locations where it currently operates. The company boasts a substantial member base, exceeding 70,000 individuals, with over 90,000 desks spread across 8 million square feet of workspace. Notably, the majority of its members comprise enterprises, while the remaining segment includes small and medium-sized businesses (SMBs), entrepreneurs, and startups, reflecting the broad appeal and diverse clientele of WeWork India's coworking spaces.

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