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SUMMARY
The coworking space provider reported a 26.7% increase in its revenue from operations to INR 1,665.14 Cr from INR 1,314.52 Cr
It managed to trim its loss by 7.5% to INR 135.77 Cr in the fiscal year 2023-24 (FY24) from INR 146.81 Cr in the previous year
The company’s improving top line partially led credit rating agency ICRA to revise its rating for WeWork India to A- from BBB
Coworking space provider WeWork India managed to trim its loss by 7.5% to INR 135.77 Cr in the fiscal year 2023-24 (FY24) from INR 146.81 Cr in the previous year.
The improvement in the bottom line came as a result of a significant uptick in its top line. The company, which was formed as a joint venture between Embassy Group and WeWork Global, reported a 26.7% increase in its revenue from operations to INR 1,665.14 Cr from INR 1,314.52 Cr.
Including an other income of INR 72.03 Cr, the company’s total income for the fiscal stood at INR 1,737.16 Cr.
The company’s improving top line partially led credit rating agency ICRA to revise its rating for WeWork India to A- from BBB on Thursday (January 23). In its rationale for the revision, the rating agency said it expects the company’s revenue to grow by 20-25% in the near term due to new desk capacities at healthy occupancy levels.
WeWork India’s total occupancy levels stood at 75% as of September 2024 and its desk capacity increased to around 1 Lakh by the end of 2024 WeWork India has presence across 62 locations in India across cities like Bengaluru, Mumbai, Delhi, Gurugram, Noida, Pune, Hyderabad and Chennai. Besides, ICRA also foresees a low customer concentration risk for WeWork India as its top 10 clients contributed to over 20% of the total revenue in FY24 and H1 FY25.
Another key factor for ICRA’s upgrade was the recent INR 500 Cr raised by the company via a rights issue. The capital infusion is expected to lead to a “substantial” improvement in its leverage and coverage metrics.
“The proceeds from equity infusion were used for redemption of non-convertible debentures (NCDs) of INR 450 Cr, which along with an estimated increase in operating profits backed by the sustained healthy occupancy levels on an increased desk capacity will result in an improvement in debt protection metrics,” ICRA said.
WeWork India Management was formed in 2016 and is promoted by Embassy Group, which holds around 72.40% of the shares and 1 Ariel Way Tenant Limited (a group company of WeWork Global) holds 22.28%. According to ICRA’s report, Embassy purchased 3.76% from the latter in an undisclosed deal in December 2024.
Meanwhile, WeWork, which has been undergoing insolvency proceedings for some time now, has been looking to sell its entire stake in the joint venture. According to reports, its plan to sell its entire stake in the entity to Real Trustee Advisory Company collapsed in September due to a valuation mismatch. The said transaction was approved by The Competition Commission of India (CCI) in June.
Where Did WeWork India Spend?
The company’s expenses jumped 19%, lower than the pace of rise in revenue, to INR 1,869.92 Cr from INR 1,569.66 Cr in FY23.
Finance Costs: At INR 507.71 Cr, this was the biggest expense for the company. It stood at INR 414.05 Cr in FY23.
Employee Expenses: WeWork India spent INR 133.91 Cr on its workforce, up 11% from INR 120.55 Cr it spent in FY23.
Other Expenses: The company spent INR 482.54 Cr in FY24 under this head, up 21% from INR 397.63 Cr.
WeWork India competes with the likes of Awfis, Smartworks, DevX Work, Indiqube, among others.
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