Whalesbook
Smartworks Coworking's total IPO issue size was ₹445.00 crore, with ₹140.22 crore remaining unutilised as of March 31, 2026.
Reader Takeaway: IPO funds mostly used as planned; TDS filing gap noted.
CARE Ratings Report Details
CARE Ratings Limited, acting as the Monitoring Agency, has submitted its quarterly report on the utilisation of IPO proceeds for Smartworks Coworking Spaces Ltd.
The report for the quarter ended March 31, 2026, confirms that the overall utilisation of funds is in line with the disclosures made in the Offer Document.
However, a crucial observation from the report is the unutilised proceeds of ₹140.22 crore as of March 31, 2026.
Investor Impact
This report provides investors with an update on how the money raised from the Initial Public Offering (IPO) is being deployed. Any deviation from the stated plan or issues in reporting can signal potential risks or inefficiencies.
For Smartworks, the confirmation of alignment with disclosures is positive. However, the unutilised amount and reporting caveats warrant investor attention.
Company Background
Smartworks Coworking, a prominent player in India's flexible workspace sector, successfully raised ₹445 crore through its IPO in February 2024. The funds were earmarked for capital expenditure towards setting up new coworking spaces, general corporate purposes, and covering issue-related expenses.
Prior to its IPO, the company had a history of reporting net losses over five financial years, though it managed to generate cash profits during these periods.
Report Implications
- Transparency Boost: The CARE Ratings report offers a periodic, independent verification of fund utilisation.
- Financial Scrutiny: Investors gain insight into how much IPO capital is still parked and for what planned future use.
- Compliance Focus: The report highlights areas needing closer attention from the company regarding financial reporting and vendor verification.
- Strategic Deployment: The remaining ₹140.22 crore is earmarked for future capital expenditure and general corporate purposes, suggesting ongoing expansion plans.
Key Risks Identified
- Limited Auditor Assurance: The Statutory Auditor's certificate provides limited assurance, which is a lower standard than reasonable assurance, heightening concerns over verification depth.
- TDS Filing Gap: Verification of vendor-wise utilization for Q4 FY26 was not possible as the company has not yet filed its quarterly TDS (Tax Deducted at Source) return. This creates a transparency gap.
- Past Financial Performance: The company has a track record of net losses over five years, although it has generated cash profits, indicating potential profitability challenges.
Competitive Landscape
Smartworks operates in a competitive market. Awfis Space Solutions Ltd, a listed peer, has shown strong financial recovery. For FY24, Awfis reported a consolidated net profit of ₹42.76 crore and revenue from operations of ₹634.07 crore. This contrasts with Smartworks' pre-IPO history of net losses.
Key Figures
- Total IPO Raised: ₹445.00 crore in Q1 FY25.
- Unutilised Proceeds: ₹140.22 crore as of Q4 FY26.
- Funds Utilised for Borrowings: ₹114.00 crore in Q4 FY26.
Next Steps for Investors
- TDS Return Filing: Investors will closely watch for the timely and accurate filing of Smartworks' quarterly TDS returns.
- Future Fund Utilisation: Monitor how the remaining ₹140.22 crore is deployed in the coming quarters for capital expenditure and general corporate purposes.
- Profitability Trends: Track Smartworks' progress in turning around its net loss situation into consistent profitability.
- Auditor Reports: Pay attention to the level of assurance provided in future auditor certificates.
- Peer Performance: Compare Smartworks' operational and financial growth against peers like Awfis.