Indiqube Spaces, promoted by Rishi Das, Meghna Agarwal and Anshuman Das, are a managed workplace solutions company offering comprehensive, sustainable, and technology-driven workplace solutions dedicated to transforming the traditional office experience.

As of March 31, 2025, the company managed a portfolio of 8.40 square feet (sft) of area (in super built-up area of property) spread over 115 centers across 15 cities having a total seating capacity of 186719. The total area under management consists of 6.92 sft (seating capacity of 153830) across 105 operational centres and 1.48 sft (seating capacity of 32888) across 10 centres for which it has executed letters of intent but are yet to be handed over. In Bengaluru, it have a portfolio of 65 centers spanning 5.43 million square feet in AUM as of March 31, 2025. It hold a combined portfolio of 6.66 million square feet across Bengaluru and Chennai constituting 79.28% of its total portfolio as of March 31, 2025. Currently it has presence across eight Tier I cities and seven non-Tier I cities. Of the top 6 non-Tier I cities of the country i.e. Ahmedabad, Kochi, Indore, Vadodara, Jaipur and Coimbatore the company has presence in three of these i.e. Coimbatore, Kochi and Jaipur

The company's business model involves partnering with landlords to not only lease new properties, but also transform non-institutional and aging Grade B properties into high-quality, green and modern workspaces. It upgrade these properties by integrating interiors, amenities, technology, and sustainability initiatives. As of March 31, 2025, such renovated properties comprise 2.48 million square feet or 29.57% of its total portfolio.

Brand 'IndiQube' stands at the core of the company's business enabling it to serve 769 clients (as of March 31, 2025) of which 59.56% were acquired directly by it. Of the total clientle of the company about 43.56% are global capability centers (GCCs) and balance 56.44% are Indian enterprises. Clients with over 300 seats, account for 63.06% of its total portfolio with an average lock-in of 36 months as of March 31, 2025.

Owing to its emphasis on enterprise clients, it have aimed to maintain long lease and lock-in tenures. As of March 31, 2025, its overall weighted average lease and lock-in tenures are for 42 months and 33 months, respectively.

As of March 31, 2025, out of 115 centers, it has 48 centers which are within 3 kilometres from an operational metro station and 45 centers that are within 3 kilometres from a metro station that is planned to be operational in future. Such centers collectively comprised 80.87% of its total centers as of March 31, 2025.

As of March 31, 2025, its rentable centers have a total area of 6.26 million square feet, with 5.68 million square feet committed to clients, resulting in a committed occupancy rate of 90.73%.

The client mix in-terms of industry IT/ITES was 51.24%, 18.60% BFSI, 11.70% Manufacturing/Automotive/Engineering/Aviation, 2.99% Ecommerce/Education-Technology, 5.98% Logistics/Pharmaceutical/Healthcare, and balance 9.49% others.

It principally generates revenues through the provision of flexible workspace solutions including value added services. In FY25, about 87.46% of the revenue come from workspace leasing and 12.74% from value added services including F&B services.

As of March 31, 2025, about 63.06% of its occupancy came from clients who leased more than 300 seats from it. The occupancy rate of steady state centres of the company stand at 86.50%. Additionally, the company have achieved an average monthly net churn rate (calculated as the occupied area terminated or contracted by the clients less the occupied area expanded by the clients divided by the average monthly occupancy for the year/period.) of (0.23)% as of March 31, 2025.

For a typical managed office, the capital expenditure for cost of fit-out is Rs 2,400 per square feet (on leasable area based on cost benchmarks for fit-out for a typical flexible workspace center). But the capital expenditure per square feet of the company is about Rs 1,507.00 as of March 31, 2025. This reflects its operational efficiency and cost optimization.

The issue and objects of the offer

The issue comprise both issue of fresh equity aggregating to Rs 650 crore and offer for sale aggregating to Rs 50 crore [Rs 25 crore each by Rishi Das & Meghna Agarwal, the promoter selling shareholders].

Of the net proceeds from fresh issue, Rs 462.649 crore will be used for funding capital expenditure towards establishment of new centres; Rs 93.035 crore towards repayment/ prepayment/ redemption, in full or in part, of certain borrowings availed by the company and balance for general corporate purposes.

Total outstanding borrowings as on May 31, 2025, were Rs 332.079 crore, on a consolidated basis.

Strength

One of the leading players in the large and growing flexible workspace market in India. Further it is one of the leading operators in Bengaluru, which accounts for 30% of the total flexible workspace stock amongst Tier I cities.

Asset-light model, focusing on leasing rather than owning properties.

Strong Operational Metrics

A diversified client base across industries and regions, minimizing the risks associated with client concentration. Top client, top five clients and top 10 clients of the company accounted for 3.47%, 11.80% and 18.22% of its revenue in FY25.

Weakness

The managed workspaces and flexible workspace industry in India is intensely competitive.

Clients may prematurely terminate their agreements, and the company may not be able to attract new clients in sufficient numbers, which could adversely affect its business. Further may not have equal negotiating power with large clients (who have/require 300 seats plus) and it may be difficult for the company to find suitable replacements upon termination of agreements with such clients.

Centres in Bengaluru, Pune and Chennai collectively account for 88.84% and 91.82% of the revenue in FY25 and FY25 respectively. Any adverse developments affecting its clients in these locations and centres could have an adverse effect on business of the company.

Changes in commercial property prices can significantly impact its leasing costs, which may adversely affect its profitability

Have experienced losses in the last three Fiscals and may continue to incur losses in the future.

As at March 31, 2025, some of lease agreements entered in the past have not been registered as required under the Registration Act, 1908 and not stamped in accordance with the relevant state stamp duty legislation. About 22.40% of its active stock is unregistered as of March 31, 2025.

The asset transformation and management solutions services of the company are exposed to development and construction risks. Similarly exposed to risks associated with development and fit-out process of the spaces it occupy.

Growth may be negatively impacted by macroeconomic factors, such as level of economic activity in the regions and cities in which the company operate, interest rate fluctuations and emergence of alternative destinations.

Any decline in occupancy rates and inability to secure new tenants and failure to pass on the potential cost increase to clients could adversely affect the profitability of the company.

Have not yet identified the exact locations for establishing new centers for which the Net Proceeds of the Offer are proposed to be utilised.

Statutory Auditors and Predecessor Auditor have included certain emphasis of matter and other matters under Companies (Auditor's Report) Order, 2020 in their audit report for Restated Financial Information of the company.

Have experienced delay/ default in payment of statutory dues in the past

One of promoter group company i.e. Innoprop Spaces Private Limited, is involved in the similar line of business as that of the Company.

Any defect in the title and ownership of the land and buildings/ properties or non-compliance of applicable law by Landlords in respect of its centres, may lead to adverse effect on business.

Valuation

Consolidated revenue was up 28% to Rs 1059.29 crore largely driven by increase in leasing area and occupancy rates. But with operating profit margin jump to 58.2% from 27.3%, a year ago, the operating profit was higher by strong 172% to Rs 616.54 crore. In FY24 the company has accounted loss on fair valuation of financial liabilities of Rs 268.953 crore (compared to Rs 112.249 crore in FY23) and nil in FY25 on account of reclassification of CCPS from financial liability to equity. After accounting for higher other income, higher interest and depreciation cost, it was a loss of Rs 157.30 crore at the PBT level against a loss of Rs 384.82 crore in the corresponding previous period. At PAT level it was a loss of Rs 139.62 crore compared to a loss of Rs 341.51 crore in the corresponding previous period.

On a post IPO expanded equity (on upper price band) the EPS was 'Rs 6.6. The price/BV is 7.7 times and the EV/sales for the company is 5 times of its FY25 sales.

In comparison, ASSL grew at 42% in FY25 to a revenue of Rs 1207.54 crore with an OPM of 33.3%. ASSL manages more than 134121 operational seats across 208 operational centres in 18 cities with occupancy of established centres (>12 months) stand at 84% and blended stand at 73%. Including fitouts, the total seats increase to 152572 seats with chargeable area of 7.8 m sq ft across 230 centres. Similarly, the SCSL grew 32% to Rs 1374.06 crore in FY26 with its OPM stand at 62.4%. At net it was a loss of Rs 63.18 crore against a loss of Rs 49.96 crore. SCSL has 8.99 million square feet of super built-up area under lease and management across 50 centres in 15 cities with a seat capacity of 203118 as of March 2025 and the occupancy rate of its operational centres in FY25 stood at 83.12%.

Awfis Space Solutions (ASSL) quotes at a PE of 107.5 times of its FY25 EPS. Its P/BV stands at 10 times and its EV/Sales at 5 times. Similarly the Smartwork Coworking Spaces (SCSL) quotes at a P/BV of 8.2 times and EV/sales of 6.3 times.

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