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The funds will be used to repay its debt and reduce cost of capital, the company said in a statement on Monday.
“With the recent successful completion of our rights issue, we are on the path to being debt-free. This underscores the trust and confidence our investors/shareholders have in our vision and strategy in India,” said Karan Virwani, managing director and CEO, WeWork India.
A rights issue is an offer by a company to its existing shareholders to buy additional shares, usually at a discounted price, to raise funds.
This fundraise follows the collapse of WeWork Inc’s plan to sell its 27% stake in the Indian unit and exit the country, approved by the Competition Commission of India (CCI), due to a valuation mismatch, as reported by ET on September 27, 2024.
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WeWork entered India in 2017 through a partnership with Embassy Group. Currently, Embassy holds a 73% stake in the Indian unit, while WeWork Inc owns the remaining 27%.
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The deal, estimated at around Rs 1,200 crore, also included Bengaluru-based property developer Embassy Group divesting a 13% stake to a consortium of investors, including the Enam Group family office, A91 Partners and CaratLane founder Mithun Sacheti.
Also, Virwani was in talks with 360 One, formerly known as IIFL, to acquire part of the 27% stake held by WeWork Inc in the Indian unit, according to the ET report.
WeWork provides flexible office spaces and custom-built solutions for businesses. Its revenue streams include memberships that offer access to office spaces, shared internet connectivity and other amenities, as well as ancillary services such as conference room rentals, printing and parking fees.
Since its inception, WeWork India has expanded to 63 operational centres across cities including Chennai, New Delhi, Gurgaon, Noida, Mumbai, Bengaluru, Pune and Hyderabad, with over 100,000 desks.
The coworking sector in India has seen significant growth over the past year, in contrast to many other global markets. Rivals like Awfis, backed by Peak XV Partners, went public in May last year with a Rs 600 crore initial public offering (IPO), which was subscribed 108 times by investors.
Other competitors in the sector include TableSpace, Indiqube, CoWorks, 91Springboard and Bhive.
Bengaluru-based Indiqube has also filed a draft red herring prospectus (DRHP) for its Rs 850-crore IPO on December 25.
WeWork India recorded a 22% rise in revenue to Rs 1,737.2 crore for the fiscal year ended March 2024, according to data from Tracxn. The company’s losses narrowed slightly, decreasing from Rs 148.8 crore in FY23 to Rs 132.5 crore in FY24.
