WeWork India IPO Faces Scrutiny Over Financial Health and Transparency

WeWork India Management Ltd’s initial public offering (IPO), aiming to raise approximately ₹3,000 crore, has attracted attention from governance advisory firm InGovern Research Services. InGovern has raised concerns regarding the company’s financial stability and transparency ahead of the offering.

Financial Concerns

InGovern highlights that WeWork India has experienced negative cash flows in recent years, despite a compounded annual growth rate (CAGR) of 22% in revenue between FY23 and FY25. The company’s lease costs remain high, and it continues to report a negative net worth. Additionally, the profitability reported in FY25 was significantly influenced by a deferred tax credit, raising questions about the sustainability of its financial performance.

Disclosure Issues

The advisory firm also points out that the IPO proceeds will not benefit WeWork India directly, as the offering is an Offer for Sale (OFS), with funds going entirely to the selling shareholders, primarily Embassy Buildcon LLP and WeWork International. This structure limits the company’s ability to utilize the raised capital for its operations or expansion. InGovern notes that the company’s disclosures have been insufficient, particularly concerning the impact of the parent company’s bankruptcy on its operations.

Market Reception

Despite these concerns, WeWork India has garnered interest from investors. The IPO has already secured approximately 45% of its issue size through anchor investors at the upper price band of ₹648 per share. The company operates flexible office spaces across major Indian cities, including Bengaluru, Mumbai, Delhi NCR, Pune, and Hyderabad, under a long-term license agreement with WeWork Global.

Conclusion

While WeWork India’s IPO has attracted significant investor interest, InGovern’s concerns over the company’s financial health and transparency raise important questions for potential investors. As the IPO progresses, it will be crucial for the company to address these issues to ensure investor confidence and long-term sustainability.