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Indiqube Spaces

By Geetanjali Kedia
about 7 hours ago

IPO Size: Rs. 700 cr 

  • Rs. 650 cr fresh issue for capex (Rs. 462 cr) and debt repayment (Rs. 93 cr, of Rs. 338 cr net debt)
  • Rs. 50 cr offer for sale (OFS) by the promoters (71% to drop to 61%)

Price band: Rs. 225-237 per share

M cap: Rs. 4,977 cr, implying 14% dilution

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

IPO Date: Wed 23rd Jul to Fri 25th Jul 2025, Listing Wed 30th Jul 2025

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

 

Bengaluru based Co-Working Company

Indiqube Spaces is a 11 year old, co-working company, with a portfolio of 1.54 lakh seats, comprising 7 million sq. ft area, across 105 centres, of which,at  1.4 lakh seats are operational, with 85% occupancy. However, steady state occupancy (centres over 12 months old) has been declining from 93.5% in FY23 to 90.1% in FY24 to 86.5% in FY25, which is concerning. Nearly 2/3rd business comes from Bengaluru (global capability centres or GCCs accounting for 44%) which is again a concentration risk.

 

Declining Margins

FY25 revenue rose 27% YoY to Rs. 1,103 cr, in line with the rise in number of seats. Revenue-to-rent ratio jumped to 2.4x in FY25, from 1.9x in FY23 (and is higher than Smartworks’ 2x), but margins have been dwindling. FY25 cash EBIT remained stagnated at Rs. 114 cr, implying contraction in margin from 13% in FY24 to 10.4% in FY25. Thus, the adjusted PBT margin is around 6%, although reported loss before tax was at Rs.157 cr, due to accounting norms under IndAS.

 

Comparison with Awfis and Smartworks

  • Business Model: Indiqube and Smartworks operates on straight line lease model, whereas Awfis is on a managed aggregation model (property owner shares capex and rental income, providing downside protection).
  • Size: Indiqube (1.4 lakh operational seats) is smaller than Smartworks (1.8 lakh) but slightly bigger than Awfis (1.3 lakh), with a higher occupancy ratio (85%) than both Smartworks (83%) and Awfis (73%).
  • But, Indiqube’s FY25 topline of Rs. 1,100 cr is the lowest in the peer set - Smartworks Rs. 1,370 cr and Awfis reported Rs. 1,207 cr.
  • Although average realisation per seat of Rs. 6,850 in FY25 is higher than Smartworks’ Rs. 6,600. Awfis, due to construction and fit-out projects business, clocks Rs. 8,800 average realization per seat.
  • Margin: Effective PBT margin for Awfis is superior at 8%, in relation to Indiqube’s 6% and Smartworks’ 4%.
  • Leverage: Awfis is net debt free, with Indiqube having net debt to equity ratio of 0.3:1, post IPO, similar to Smartworks’ 0.4:1.
  • Equity raised till date: Indiqube has raised only Rs. 320 cr in equity till date to build its business (29% stake held by PE Westbridge), as against Rs. 500 cr for Smartworks and about Rs. 400 cr for Awfis. Thus, Indiqube has deployed capital prudently.

 

Aggressive Pricing

Indiqube’s market cap of nearly Rs. 5,000 cr leads to an enterprise value (EV) of Rs. 5,200 cr, higher than both Awfis (EV of Rs. 4,500 cr) and Smartworks (Rs. 5,100 cr) despite lower size and declining margins.

Awfis clocked PBT of Rs. 97 cr in FY25, implying an earnings multiple of 46x, as against ~76x for Indiqube. Higher price for a commoditized business and declining steady state occupancy is unjustified.