Awfis, the coworking space provider poised for an initial public offering (IPO), has reported a consolidated net loss of INR 46.6 Crore in the financial year 2022-23 (FY23), showcasing an 18% reduction from the previous fiscal year. The decline in losses is attributed to substantial business growth, fueled by increased demand for flexible office spaces.
The startup, founded in 2015 by Amit Ramani, has undergone a transformation from a coworking network to a tech-enabled workspace solutions platform. Operating on a consolidated net loss of INR 57.1 Crore in FY22, Awfis witnessed a remarkable turnaround, driven by a 112% YoY increase in operating revenue to INR 545.3 Crore in FY23.
Fueling Growth Amid Pandemic Shifts:
In its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), Awfis attributes its growth to the changing dynamics in the work landscape induced by the COVID-19 pandemic. The reverse migration of workers has led to increased demand for flexible workspaces, driving the adoption of the hub-and-spoke model.
Expenses and Profitability:
Despite a noteworthy surge in total expenses, which increased by over 82% to INR 612.4 Crore in FY23, Awfis maintained profitability at the EBITDA level. EBITDA rose to INR 176 Crore, a significant improvement from INR 90 Crore in the previous fiscal year.
Key Expense Breakdown:
- Sub-Contracting Expense: Saw a 116% YoY jump to INR 90.5 Crore in FY23, covering design fees and material costs associated with construction services under Awfis Transform.
- Employee Costs: Surged by 77%, totaling INR 95.8 Crore, with INR 84 Crore allocated to salaries, wages, and bonuses, and an additional INR 4 Crore on ESOPs in FY23.
- Depreciation and Amortisation Expenses: Increased to INR 150 Crore, up from INR 98.4 Crore in the prior year.
- Finance Cost: Rose over 49% YoY to INR 72.7 Crore, primarily driven by interest paid on lease liabilities.
- Rent & Electricity: Expenditure on electricity and rent stood at INR 39.1 Crore and INR 50.7 Crore, respectively, in FY23.
Outlook and IPO Plans:
Awfis acknowledges the surge in demand for flexible workspaces due to the pandemic but cautions that historical growth rates may not predict future trends. The company, set to raise INR 160 Crore through a fresh share issue in its IPO, forewarns of heightened competition in the dynamic flexible workspace sector.
