WeWork India Management's $338 million IPO was fully subscribed on the final day of bidding on Tuesday, driven by institutional demand even as retail investors stayed cautious about its steep valuation following recent co-working listings.
Why it's important
WeWork India's IPO is seen as a test of investor appetite in the domestic co-working space, which has seen a spate of listings amid growing demand for flexible office space.
The company will continue to operate under an exclusive licence from WeWork Global, the U.S. firm once valued at $47 billion before it shelved its 2019 IPO.
Context
WeWork India is seeking a valuation of 86.85 billion rupees ($978.5 million) at the top end of its Rs 615-648 per share price band, according to Reuters calculations, a figure that far exceeds those of its recently listed peers.
IndiQube Spaces was valued at Rs 44.13 billion in its debut in July, while Smartworks Coworking Spaces debuted at Rs 52.96 billion later that month.
Valuations are emerging as the key differentiator amid thin profit margins and high lease costs.
"Compared with peers like Awfis or Smartworks, WeWork is priced at a premium, making investors cautious," said Aishvarya Dadeech, chief investment officer at Fident Asset Management.
IndiQube Spaces delivered a tepid debut in July, while Smartworks saw gains on listing day.
By the numbers
WeWork India's IPO, a full offer for sale of 46.3 million shares, drew bids worth Rs 18.97 billion as of 5:15 pm IST, exchange data showed.
Qualified institutional buyers bid for 1.79 times their quota, while retail investors subscribed 0.61 times.
The issue, covered only 16% earlier in the day, picked up after strong institutional demand.
Shares are slated to list on the BSE and NSE exchanges on October 10.