IPO Size: Rs. 143 cr, Entirely Fresh Issue   

• Rs. 73 cr capex for 4 new centres
• Rs. 35 cr debt repayment, of Rs. 114 cr net debt

Price band: Rs. 56-61 per share

M cap: Rs. 550 cr, implying 26% dilution

• 75% reserved for QIBs and only 10% for retail, as company reported losses

IPO Date: Wed 10^th Sep to Fri 12^th Sep 2025, Listing Wed 17^th Sep 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Tier2 Focused Managed Office Space Provider

Dev Accelerator, a 21.9% associate company of listed Dev Information Technology, is an 8 year old small co-working and managed office space provider, with a portfolio of only 14,144 seats across 0.86 million sq ft super built up area in 28 centres in 11 cities. Of these, 13,759 seats are operational with 87% occupancy rate. Over the next 2 years, it plans to add 4 new centers on straight line lease model, aggregating 0.66 million sq ft area, for which Rs. 73 cr capex will be incurred from IPO proceeds.

Leveraged Balance Sheet

Due to majority business model operating on straight line lease, need for capital is large, which has been majorly debt-funded. Even post repayment via IPO, net debt will be Rs. 79 cr, down from Rs. 114 cr at present. Net worth though, will rise to Rs. 198 cr, from Rs. 55 cr, as of 31.3.25. 

‘True’ Margin not Disclosed

IndAS accounting makes reported EBITDA of Rs. 80 cr inaccurate for valuation, as that excludes rent payment, which is the biggest expense items for the business. Company has not disclosed Cash EBIT or adjusted EBITDA for actual lease payments, but the same may be estimated at around Rs. 26 cr, implying 17% margin on Rs. 159 cr revenue. Nearly a fourth of company’s topline of Rs. 159 cr comes from contracting business (design and execution segment) which explains the higher margin.

PAT, as per IndAS, was reported at Rs. 2 cr for FY25, leading to only 1% net margin.

Steep Pricing for Nano-Cap Stock

A year back, company raised Rs. 24 cr at an effective price of Rs. 46.4 per share.

Current enterprise value is estimated at Rs. 630 cr, translating to an EV per seat of Rs. 4.5 lakh, much higher than the peer average of Rs. 3.0 to Rs. 3.5 lakh per seat.

On earnings too, Dev’s FY26E PAT is estimated close to Rs. 10 cr, due to interest saving on debt repayment, implying a PE multiple of 55x, on current year basis. This is very aggressive for the same size of operations and also with larger peers Awfis and Indique ruling much lower.