Awfis Discloses a Senior Executive's Insider Trading Violation

Nitin Konde, Varun Bhardwaj

Nov 29, 2024 — 2 min read

Awfis Reveals Insider Trading Breach by Senior Executive

Awfis, a coworking space provider, stated that one of its executives had broken insider trading regulations. Anandita Seal Sarkar, Awfis's vice president of sales, sold 15,764 firm shares with previous approval, but on the same day, she bought 25 shares without the compliance officer's prior consent, according to an exchange filing. On September 30, the 25 shares were purchased for INR 698.44 each, for a total of INR 17,461, whereas the shares were sold for INR 693.02 each, for a total of INR 1.07 lakh. According to the corporation, this violated the 2015 Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations code of conduct.

How Issue Got Highlighted?

According to Awfis, the problem was found on November 26 during a normal examination and was sent right away to its audit committee. At this point, the panel will make a decision. Both the board chairman and the chairman of the audit committee have been informed of the situation. In accordance with the code of conduct's obligations, the audit committee will take any appropriate measures, according to the document. Notably, this is not the first instance in which a listed startup's leadership has been in hot water for violating insider trading regulations.

Honasa Consumer, the parent company of Mamaearth, told the stock exchanges last year that a senior official of the firm had violated insider trading regulations by trading shares for INR 15 lakhs without the company secretary's or compliance officer's prior consent. Awfis shares were launched on the BSE in May of this year at INR 432.25 each, which was 12.8% more than the company's issue price of INR 383. Profitable figures and a positive outlook have since propelled the stock upward.

Financial Dynamics of Awfis

For the second quarter of FY25, Awfis Space Solutions recorded operating revenue of INR 292.38 crore, up 40.46% from INR 208.15 crore in the same period last year. In the July–September quarter, the co-working space provider reported a net profit of INR 38.67 crore, up from a loss of INR 4.34 crore in the second quarter of FY24. As the business grew to meet demand, increasing subcontracting, labour, and operating costs drove a 30.85% YoY increase in total expenses to INR 287.29 crore. Employee expenditures jumped 16.75% to INR 39.38 crore, while subcontracting expenses, which are linked to its profit-sharing model, increased 30.80% YoY to INR 56.13 crore.

Additionally, operating expenses increased 30.41% year over year to INR 87.01 crore. With a 43% quarter-over-quarter rise, the core business segment—renting co-working spaces and associated services—generated INR 218.31 crore, or roughly three-fourths of revenue. At INR 68.15 crore, revenue from fit-out and construction projects increased by 36.3% as well.