Wed. Dec 25th, 2024

Is AWFIS Space Solutions The Next Big Space Stock?

Industry Overview: India Macroeconomic Overview 

  • India is the world’s fifth-largest economy.
    • Gross domestic product (“GDP”) and Growth Rate India is one of the fastest growing and the fifth-largest economy in the world for 2023, according to the International Monetary Fund (“IMF”). For 2023, India had a Gross Domestic Product (“GDP”) growth rate of 7.8%
  • Contribution of Services Sector to the GDP 
    • The services sector led by technology and financial services continues to be the key driver of the Indian economy—it represented 53% of Fiscal 2023 Gross Value Added (“GVA”) and it has grown at a compound annual growth rate (“CAGR”) of 6.5% over 2014-23.
  • Major Structural Reforms by Indian Government to Fuel Economic and Real Estate Growth
    • Amendment to Special Economic Zone (SEZ) Rules, 2006 (Denotification):
    • Make in India, 2014 
    • Goods and Services Tax, 2017 (“GST”) 
    • Real Estate Regulation and Development Act, 2016 (“RERA”) 
  • International Trade and Foreign Investments in Real Estate
  • Factors Propelling Growth of Indian Office Market 
    • Favorable Demographic
    • Continued Infrastructure Development
    • Foreign Investment
    • China + 1 Strategy

Indian Office Market Overview

ParticularsBengaluruMMRHyderabadGurgaonChennaiPuneNoidaKolkataDelhiTotal
Total Stock as of December 31, 2023(million sq. ft.)215.7144.6126.889.387.275.945.435.015.0832.0
Occupied Stock as of December 31, 2023(million sq. ft.)182.0112.890.359.471.360.429.321.510.6637.6
Vacancy as of December 31, 2023 (%)15.5%22.0%27.2%33.8%18.1%20.4%35.6%38.1%29.4%23.4%
Annual Absorption Avg. 2014 – 23(million sq. ft.)15.16.77.95.45.35.52.50.80.749.7
Market Rents* as of December 31, 2023 (persq. ft. / month)88.3129.365.696.577.676.154.158.7203.294.4

AWFIS Space Solutions Background:

Here’s a rundown on Awfis Space Solutions, a leading co-working space provider in India:

Background

  • Founded in 2014 by Amit Ramani
  • Public company headquartered in Delhi, India
  • Largest flexible workspace solutions company in India by number of centers (as of Dec 31, 2023)

Services

  • Offers a variety of workspace solutions including co-working spaces, private cabins, meeting rooms, and virtual offices
  • Caters to various client needs, from single seats to customized office spaces for startups, SMEs, large corporations, and MNCs
  • Provides flexible workspace solutions with durations ranging from an hour to several years

Growth

  • Started in Delhi and expanded to 16 cities across India
  • Early expansion into Tier 2 cities like Jaipur and Indore helped establish a strong presence

Main objects of the AWFIS Space Solutions:

  • To provide workspace solutions including shared work space, co-working workspace, business centre services, office solutions, personal workstations, meeting rooms, conference rooms, etc
  • To establish, operate, manage, control, wind up or otherwise deal in any manner with fully or partly furnished, staffed and equipped business centers comprising one or more individual offices, serviced office, commercial and residential accommodation and offering all ancillary business services relating to the same.
  • To provide incubation services, business planning services, formulating market strategies, providing full support in operationalizing business plans, including team building, providing strategic and operational guidance, marketing, promotion, training and development programmes to entrepreneurs, to process the development of strategic tie-ups with other incubators, corporates, research and development labs, industry associations to be able to provide comprehensive support to the incubatees.
  • To create web and mobile applications for commercial office space use and to provide a web based platform for just in time space reservations for co-working, meeting rooms, conference rooms, offices, desks, business centers and to create a virtual community to connect designers, builders and users for office and commercial space and sell products through a social network medium.
  • To carry on in India and abroad the business of rendering services in office space, construction, furnishing, running and management of business and also of operating, establishing, providing and managing e-commerce and m-commerce websites.
  • To carry on in India and abroad, the business of developing, designing, planning, executing, consultancy services or otherwise deal in, operate, provide and facilitate in any manner the entire range of informationtechnology enabled services, websites, mobile websites, web-enabled services, value-added services, establishment and operation of customer call centres, customer service centres, technical support centres, billing, payment processing, claims processing and document processing in support of and in furtherance of the above objects

BUSINESS STRATEGY of AWFIS Space Solutions:

  • Continue to build an industry leading capital efficient model
  • Expand in new and existing markets
  • Enhance our product and service offerings
  • Improving operational efficiency

Overview of AWFIS Space Solutions:

  • Largest flexible workspace solutions company in India as on December 31, 2023, based on total number of centers.
  • are ranked 1st among the top 5 benchmarked players in the flexible workspace segment with presence in 16 cities in India.
  • have 169 total centers1 across 16 total cities1 in India, with 105,258 total seats1 and total chargeable area1 of 5.33 million sq. ft

BUSINESS MODEL of AWFIS Space Solutions:

Two differentiated models for sourcing and procuring workspace:

  • SL model: Under the SL model, developers or space owners lease space to flexible workspace operators on traditional leases wherein typical market terms and conditions are applicable, including a fixed monthly rental, common area maintenance charges, security deposit, minimum lock-in period, lease tenure and escalations.
  • MA model: The MA model is more collaborative in nature, wherein our space owners become a stakeholder in the center by co-investing in the fit-out infrastructure.

Segment Information of AWFIS Space Solutions

ParticularsSegment Information
Fiscal 2021Fiscal 2022Fiscal 2023Nine months ended December 31, 2023
(₹ in million)(% of revenue from contract with customers)
(₹ in million)(% of revenue from contract with customers)
(₹ in million)(% of revenue from contract with customers)(₹ in million)(% of revenue from contract with customers)
Co-working space on rent and allied

services

1,619.8490.82%1,963.3876.38%4,188.4976.81%4,511.1073.17%
Construction and fit-out projects114.866.44%487.3018.96%1,050.1819.26%1,472.9423.89%
Others48.902.74%119.774.66%214.153.93%180.952.94%
Revenue from contract with customers1,783.60100.00%2,570.45100.00%5,452.82100.00%6,164.99100%

Client concentration of AWFIS Space Solutions:

ClientFiscalNine months ended December 31,
2021202220232023
Top client9.23%6.64%2.97%4.63%
Top 5 clients26.67%18.33%12.67%13.15%

Supply Network and Process of AWFIS Space Solutions

ParticularsAs at March 31, 2021As at March 31, 2022As at March 31, 2023As at December 31, 2023
Operational
Operational Cities11131616
Operational Chargeable Area (in million sq. ft.)1.462.213.504.10
Operational Centers5884119138
Operational Seats30,25346,15268,20379,946
Occupied Seats17,94629,09951,14060,038
Occupancy Percentage59.32%63.05%74.98%75.10%

Between March 31, 2021 and March 31, 2023, our operational centers, operational seats and chargeable area grew at a CAGR of 43.24%, 50.15% and 54.83%, respectively.

Technichem Organics IPO Analysis
Technichem Organics IPO beware : Should You Invest?

Employees information of AWFIS Space Solutions

FunctionNumber of employees
Awfis Space (comprising the Space Solutions and Allied Services, and Awfis Transform segments) 
Real Estate and Leasing10
Design and Projects63
Operations184
Sales54
Information Technology19
Management7
Support97
Total (Awfis Space (comprising the Space Solutions and Allied Services, and Awfis Transform segments))434
Awfis Care 
Housekeeping2,246
Technical306
Backend support67
Total (Awfis Care)2,619
Grand Total3,053

Strength:

Believe that our leadership position in the flexible workspace ecosystem, is due to our strengths that not only set us apart but also enable us to benefit and capture the growth in India’s rapidly evolving flexible workspace landscape

Key financial ratios of AWFIS Space Solutions:

 

Parameter

 

As at and for the Fiscal 2021

As at and for the Fiscal 2022Y-o-Y

growth (Fiscal 2021

v. Fiscal 2022)

As at and for the Fiscal 2023Y-o-Y growth (Fiscal 2022 v.

Fiscal 2023)

As at and for the nine months ended December 31,

2023

Citichem India IPO analysis
Citichem India IPO: Should You Avoid This Risky Bet?
(in  million, unless otherwise stated)
Restated loss for the period / year(426.42)(571.56)34.04%(466.37)(18.40)%(189.42)
Restated loss for the period/years (as percentage of total income)(19.74)%(20.51)%3.89%(8.24)%(59.80)%(2.99)%
EBITDA907.49899.96(0.83)%1,760.6395.63%1,954.99
EBIT39.13(84.37)(315.64)%260.84409.15%502.16
Cash EBIT71.1614.22(80.02)%361.542,442.85%669.80
Cash EBIT Margin3.99%0.55%(86.13)%6.63%1,098.70%10.86%
RoCE10.88%1.75%(83.92)%25.26%1,344.34%49.91%*
Net debt(853.23)(134.19)(84.27)%(262.26)95.44%(682.56)
Debt to equity ratio (in times)0.020.13549.44%0.06(49.54)%0.10
Net debt to equity ratio (in times)(0.57)(0.14)(74.97)%(0.15)9.30%(0.28)
Occupied seats (as of exit

month)

17,94629,09962.15%51,14075.74%60,038
Occupancy percentage (as of exit

month)

59.32%63.05%6.29%74.98%18.92%75.10%

AWFIS Space Solutions’s Subsidiary Companies

  • Company has one Subsidiary, Awliv Living Solutions Private Limited
  • Awliv Living Solutions Private Limited was incorporated as a private limited company on June 7, 2016
  • Nature of business 
    • Awliv Living Solutions Private Limited is authorised under its memorandum of association inter alia to engage in the business of providing all type of living space solutions to customers / clients including shared living accommodations, space for parking lots, home solutions, etc. and to act as an internet service provider and to provide related services including satellite and broad band based communication services and to develop consumer oriented electronic commerce and all other similar and/or allied services.

CAPITALISATION STATEMENT of AWFIS Space Solutions

ParticularsPre-Offer as at December 31, 2023
Borrowings 
Non-current borrowings175.03
Current borrowings62.17
Total borrowings237.20
  
Equity 
Equity share capital191.52
Other equity2,280.33
Total equity2,471.85
  
Non-current borrowings / total equity (times)0.07
Total borrowings / total equity (times)0.10

FINANCIAL INDEBTEDNESS of AWFIS Space Solutions

Category of borrowingsSanctioned Amount*Outstanding amount as on April 30, 2024
Secured  
Term Loan650.00314.04
Working capital facilities (Overdraft/WCDL/WCTL)400.00Nil
Vehicle Loan5.124.62
Total1,055.12318.65

Shareholding of AWFIS Space Solutions

AWFIS Space Solutions
AWFIS Space Solutions
Promotors41.53%
Public58.47%

Shareholding of Directors in Company

 

Name

 

No. of Equity Shares

Percentage of the pre- Offer paid up share capital on a fully diluted

basis (%)

Amit Ramani12,163,08418.19%
Arjun Bhartia1,047,5551.57%

Awfis Space Solutions IPO Details (as of May 18, 2024)

IPO Status: The IPO is open between May 22nd and May 27th, 2024.

Anya Polytech IPO analysis
Anya Polytech IPO Unlock : Is This Overhyped Issue One to Avoid?

Issue Details:

  • Issue Size: ₹598.93 Crore
  • Price Band: ₹364 – ₹383 per share
  • Type: Main Board IPO
  • Listing: BSE & NSE (expected listing date May 30th, 2024)

Other Important Dates:

  • Allotment Finalization: May 28th, 2024 (expected)
  • Refund & Demat Credit: May 29th, 2024 (expected)

Risks and Considerations of AWFIS Space Solutions:

Please refer page numbers of RHP  396-404

Important: Clearly state this is not financial advice and readers should do their own research before investing.

Also followed

Go Digit General Insurance IPO: Soaring Growth or Risky Ride?

AADHAR HOUSING FINANCE LIMITED IPO of 2024

Unimech Aerospace IPO Review
Unimech Aerospace IPO Beware : What Could Go Wrong?

Is TBO TEK LIMITED the Next Multibagger IPO of 2024? Find Out Here!

Public Provident Fund (PPF)

Sovereign Gold Bonds(SGB): A Safe Method to Buy Gold-2024

One thought on “Is AWFIS Space Solutions The Next Big Space Stock of 2024?”

Leave a Reply

Your email address will not be published. Required fields are marked *