'Perspectives by Q' features industry leaders and CXOs from Corporate Real Estate and Flex Ecosystem
Q1 - Was IPO always part of Awfis's plan? What made you decide to go public??
A1 - Since we started back in 2015, we've been one of the first branded players in the segment to deliver many firsts: the first to enter Tier 2, the first to deviate from the global model of leasing large spaces and arrive at an optimum centre size for ideal opex, and the first to use the FOCO model in this category with its unique Managed Aggregation Supply Model. Structured on a profit or revenue-sharing model with space owners, with a capital of fit-outs borne mainly by them, this model makes Awfis' business capital-light and risk-averse.
We also recognised early on that in a large country like India, the scale of operations would be instrumental in making a meaningful impact on the sector. Today, the Awfis network stands at 181 centres across 17 Tier 1 and Tier 2 cities. During the pandemic, the company pivoted and evolved from being a coworking space to an integrated workspace solutions platform providing end-to-end solutions for a spectrum of requirements. From hourly & daily mobility solutions to coworking and managed office solutions, from Design and Build to Facility Management, Awfis became the partner of choice for diverse client cohorts. Today, Awfis has a mix of 2459 clients – both small and large enterprises with almost 60% of the demand from over 100 seat cohorts.?
As we continued to expand and open new centres and to look at the projected potential growth for flex in the country and considering the Indian market conditions, we decided to launch an IPO to meet our working capital needs and support our growth initiatives—another first in the coworking category.
Q2 - The Awfis IPO was immensely successful, oversubscribed 108x times; what does it mean for the Flex ecosystem??
A2 - The Awfis IPO received an overwhelming response, a clear testament to the investors' belief in Awfis and the coworking story in India.?
According to data from Knight Frank India, flexible workspace providers transacted 3.8 million square feet of office space across the top eight markets of India in the first quarter of this year, accounting for 23% of overall transactions in the segment. A study by Avendus Capital indicates that the flexible workspace segment in India is expected to grow at a compounded annual growth rate of 15%, reaching up to 126 million square feet by 2028, with a market size of approximately $9 billion.?
Additionally, factors such as changing workplace dynamics, a flourishing startup ecosystem, favorable government policies, and infrastructural advancements in non-metro cities are driving players in the segment to expand beyond the metros.
Flex is touted to be a sunrise sector by all accounts. Its market debut of Awfis has brought a new level of legitimacy to this industry in the eyes of institutional investors and the public market, signalling that it is here to stay.
Q3 - What can we expect to see next from Awfis??
A3 - We recently announced our quarterly results, highlighting a successful close to FY 24. We achieved profitability, with a positive PBT of INR 1.4 crores. Additionally, our EBITDA grew by 43% YoY, with margins at 31.5%.
Our existing network, spanning nine Tier 1 and eight Tier 2 cities, provides a strong foundation for further expansion. We plan to deepen our presence in high-demand micro-markets within these Tier 1 cities and upgrade workspaces to higher-grade offices through design and refurbishment initiatives in prime micro-markets. We will continue to maintain the ratio of our Managed Aggregation portfolio and will strengthen our foothold in Tier 2 markets.?
We are committed to growth and leadership in the Indian market, focusing on providing Grade A workspaces that cater to the evolving needs of businesses nationwide.
Credit
Amit Ramani , Founder & CEO at Awfis Space Solutions Limited