Smartworks and Ecom Express Receive SEBI Approval for IPO

Nitin Konde, Varun Bhardwaj

Dec 4, 2024 — 3 min read

SEBI Approves IPOs for Smartworks and Ecom Express

SEBI has approved the initial public offerings (IPOs) of coworking space provider Smartworks and logistics business Ecom Express. According to the information on SEBI's website, the regulator made the remark against Ecom Express on November 29.

A prior, on November 28, Smartworks received the observation. The public offering is approved by SEBI when an observation is issued. In August, Ecom Express submitted its draft red herring prospectus (DRHP) for an initial public offering (IPO) for INR 2,600 Cr. This includes an offer for sale (OFS) for INR 1,315.5 Cr and a new issue of equity shares up to INR 1,284.5 Cr. In the same month, Smartworks submitted its draft IPO documents. The company's initial public offering (IPO) will include an offer for sale (OFS) of up to 67.49 lakh equity shares and a new issue of equity shares valued at INR 550 Cr. Before submitting its Red Herring Prospectus (RHP), the coworking company also intends to raise INR 110 Cr through a pre-IPO placement.

Operations and Financial Dynamics of Both the Firms

The late TA Krishnan, Manju Dhawan, K Satyanarayana, and Sanjeev Saxena founded Ecom Express in 2012 as a pure-play provider of B2C ecommerce logistics solutions. It makes money by providing services to consumers in the Indian e-commerce sector, which includes D2C, vertical, horizontal, and fast commerce platforms. In the fiscal year 2023–2024 (FY24), the company reported a net loss of INR 255.8 Cr on operational sales of INR 2,609 Cr. Conversely, Smartworks, a shared workspace service that provides businesses with customised coworking solutions, was established in 2016 by Neetish Sarda and Harsh Binani.

With more than 40 locations in 14 cities, including Bengaluru, Kolkata, Delhi NCR, and Mumbai, it boasts more than 8 million square feet of office space. It says it serves over 600 businesses, such as Moglix, DHL, Starbucks Coffee, and Honeywell. It faces competition from companies like IndiQube, WeWork India, and Awfis. According to its DRHP, Smartworks' operating revenue increased to INR 1,039.4 Cr in FY24, while its net loss decreased to INR 49.8 Cr.

IPOs are Becoming More Common Among Startups

With initial public offerings (IPOs) emerging as a crucial means of obtaining funding, the Indian startup scene is undergoing a significant transformation. For the second time in history, mainboard initial public offerings (IPOs) have raised more than INR 1 lakh crore in 2024. Over INR 1.03 lakh billion has been raised through 70 initial public offerings (IPOs) this year, the most since 2007. In contrast, 63 firms raised more than INR 1.19 lakh crore through IPOs in 2021, compared to 100 IPOs that were launched in 2007 and raised INR 34,179 crore.

This remarkable expansion coincides with a slowdown in the global IPO markets, which has seen a 16% drop in capital raised and a 12% drop in listings. India has distinguished itself on the international scene with its distinct blend of economic stability, a flourishing digital economy, and a developing private equity (PE) and venture capital (VC) ecosystem.