Indiqube Spaces
- Indiqube Spaces is coming out with a 100% book building; initial public offering (IPO) of 3,10,44,444 shares of Rs 1 each in a price band Rs 225-237 per equity share.
- Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
- The issue will open for subscription on July 23, 2025 and will close on July 25, 2025.
- The shares will be listed on BSE as well as NSE.
- The face value of the share is Rs 1 and is priced 225 times of its face value on the lower side and 237 times on the higher side.
- Book running lead managers to the issue are ICICI Securities and JM Financial.
- Compliance Officer for the issue is Pranav AK.
Profile of the company
Indiqube Spaces is a managed workplace solutions company offering comprehensive, sustainable, and technology-driven workplace solutions dedicated to transforming the traditional office experience. Led by an experienced management, with entrepreneurial track record since 1999, its diverse solutions range from providing large corporate offices (hubs, i.e., the main office of its clients wherein key functions, leadership teams, and primary operations are based, and is typically located in a central or strategic area) to small branch offices (spokes, i.e., smaller, decentralized office spaces of its clients spread across different cities or regions) for enterprises and transforming the workplace experience of their employees by combining interiors, amenities and a host of value added services which are incremental to the workspace leasing provided by it and comprise amenities, green initiatives, designed interiors, B2B and B2C solutions ranging from facility management, sale of goods, asset maintenance and plantation to catering, and transportation services for the employees of its clients and technology applications, through contracts with clients occupying the space within its centers or third-party clients (VAS).
The company complements its solutions through backward and forward integration capabilities. While backward integration focuses on asset renovation, upgradation and customized build-to-suit models, forward integration enables it to provide business-to-business (B2B) and business-to-customer (B2C) VAS to clients and their employees. These, coupled with its core offering of plug and play offices, enable it to serve the workspace value chain comprehensively.
It manages a portfolio of 115 centers across 15 cities, consisting of 105 operational centres and 10 centres for which it has executed letters of intent, covering 8.40 million square feet of area under management (AUM) in super built-up area (SBA) with a total seating capacity of 186,719 as of March 31, 2025. The company has expanded its portfolio by 3.46 million square feet of AUM with the addition of 41 properties and five new cities between March 31, 2023 and March 31, 2025. In Bengaluru, it has a portfolio of 65 centers spanning 5.43 million square feet in AUM as of March 31, 2025. It is amongst the leading operators in Bengaluru as of March 31, 2025. Its supply acquisition strategy prioritizes acquiring full buildings in high-demand micro-markets with robust infrastructure connectivity, low vacancy rates, and strong talent catchments. This targeted approach ensures the long-term relevance of its offerings while enabling it to scale rapidly.
Proceed is being used for:
- Funding capital expenditure towards establishment of new centers
- Repayment/pre-payment, in full or in part, of certain borrowings availed by the company
- General corporate purposes
Industry Overview
India’s organized commercial office stock stands at approximately 883 million sq. ft. as at March 31, 2025. India recorded a gross absorption of 66.6 million sq. ft. in CY2019. Office demand slowed across all cities post March 2020 due to the impact of the global pandemic and local lockdowns in CY2020 and CY2021. Globally and in India, companies paused decisions on office take-up as management teams and corporate real estate decision makers started focusing more on managing short-term business continuity priorities and thereafter assessing future growth plans and office accommodation strategies. The office sector in India exhibited recovery in CY2022 as occupier sentiments improved with the relaxation of the pandemic led restrictions and a return to office driven by improved vaccination rates across regions. As a result, strong leasing performance was observed in CY2022 (62.0 million sq. ft. gross absorption) in comparison to CY2021 (44.8 million sq. ft. of gross absorption).
Meanwhile, the flexible workspace stock in Tier 1 cities grew from more than 35 million sq. ft. by the end of CY 2020 to over to 88 million sq. ft. as of Q1 CY 2025. The 28 key clusters identified across Tier 1 cities account for around 80% of total flexible workspace stock in these cities. Given the diversity of, clients, client requirements and nature of end-user demand, a fair share of the commercial office stock including both multi-tenanted & standalone buildings and Grade A & Non-Grade A buildings in the identified key clusters could be considered as potentially relevant stock for flexible workspace operators in India. Bengaluru currently is both the largest commercial office and flexible workspace market of India accounting for around 30% of the total flexible workspace stock amongst Tier 1 cities.
India has witnessed growth in demand for flexible workspaces. Flexible workspace stock addition by operators has witnessed growth over the years and approximately 18 - 22 million sq. ft. of stock was added in 2024. Features and benefits such as flexibility, capital efficiency, cost optimization, employee well-being and operational outsourcing are some of the key demand drivers of flexible workspace solutions amongst both startups and enterprises. Through a widespread network of centres across the country and with the assistance of various in-house or aggregator owned hybrid digital products, leading flexible workspace operators possess the ability to support various organizations in a more effective implementation of their hybrid and distributed working policies.
Pros and strengths
One of the leading players in the large and growing flexible workspace market in India: The flexible workspace stock in India is currently over 96 million square feet as of March 31, 2025. While over 90% of this stock is spread across key Tier-I markets in India, demand for flexible workspaces in non-Tier I cities has also been growing. The total addressable market (TAM) for flexible workspace operators is expected to be approximately represents a sizeable opportunity of 280 - 300 million square feet (in terms of area) and Rs 730 - Rs 960 billion (in terms of value) by 2027. The company is amongst the leading operators in Bengaluru as of March 31, 2025. Further, its presence in seven non-Tier I cities in India, gives it an edge in expanding to high-potential regions. As of March 31, 2025, it serves over 769 clients across various sectors including information technology/information technology enabled services, manufacturing, automotives, engineering, aviation, banking, financial services and insurance, consulting, e-commerce, educational technology, logistics, pharmaceuticals, and healthcare.
Prudent business management practices with strong operational metrics: The company concentrates on leasing large to midsized full buildings over fractional spaces and as of March 31, 2025, 64.71% of its portfolio consists of full buildings. A large number of its properties are in hub and spokes clusters resulting in concurrent allocation of manpower and resources. This approach not only bolsters cost efficiency but also strengthens its market position in sought-after micro-markets. Its property lease structures are aligned with client lock-ins, where landlords typically have a three-year lock-in period, while clients have a weighted average lock-in tenure of 33 months, as of March 31, 2025. This synchronization ensures operational stability and minimizes risks associated with early lease terminations. Its lease structure also allows it to manage revenue escalation provisions effectively, ensuring predictable cash flows and financial stability.
Capital efficient model with resilience and comprehensive risk mitigation: The company has strategically adopted an asset-light model, focusing on leasing rather than owning properties. This model allows it to secure 10-year leases with a three-year lock-in period, extendable for another 10 years, ensuring flexibility and control in its arrangements with lessors. It maintains termination rights in its leases, providing adaptability and risk mitigation in changing market conditions. 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) (sample unit economics model is solely for representation for a single center and may not reflect portfolio level averages for the industry). Its capital expenditure per square feet is Rs 1,507.00 as of March 31, 2025.
Focused on fostering an ecosystem of green buildings: The company is committed to sustainability across water, energy, and waste management in addition to asset renovation and upgradation. Pursuant thereto, it incorporates various initiatives in its operations such as roof top solar plants, sewage treatment plants, rainwater harvesting system, water treatment plant, deployment of water efficient fixtures and energy saving equipment. Owing to these initiatives, 36.44% of its operational area spread across 29 centers covering an area of 2.52 million square feet have received certifications from the Indian Green Building Council and Leadership in Energy and Environmental Design as of March 31, 2025. Additionally, it has seven centers, covering 0.75 million square feet where it has applied for green certifications and are under various stages of approval as of March 31, 2025.
Risks and concerns
Maximum revenue comes from few cities: The company’s revenue from its operations in collectively Bengaluru, Pune and Chennai constituted 88.84%, 91.82% and 93.18% of its total revenue from operations in Fiscals 2025, 2024 and 2023, respectively. As such, any decrease in revenues from its centers in these cities, including due to increased competition or supply, or reduction in demand, may have an adverse effect on its business, results of operations and financial condition. It cannot assure that current locations of its centers will continue to be attractive. Any changes in demographic patterns may lead to a decline in development in the relevant location. Further, any significant disruption, including due to social, political or economic factors or natural calamities or civil disruptions, impacting these centers in Bengaluru, Pune or Chennai, may adversely affect business, results of operations and financial condition.
Business is sensitive to real estate market fluctuations: The company strategically focus on leasing rather than owning properties. As such, its business is intrinsically linked to the dynamics of the real estate market. Fluctuations in the real estate market can significantly impact its financial performance and operational stability. When real estate prices rise, the cost of leasing or acquiring new properties increases. This means higher operational expenses, which can erode its profit margins if it is unable to pass these costs onto its clients. Moreover, higher property costs can deter expansion plans or necessitate more capital investment, putting additional strain on its financial resources. It witnessed a decline in its occupancy rate from 83.68% as of March 31, 2023 to 80.21% as of March 31, 2024. This was primarily because the increase in its occupied area was not commensurate with the increase in its rentable area, leading to a decline in its occupancy rate. If it cannot secure favourable lease terms, it could limit its ability to expand its network of centers or renew existing leases at competitive rates, directly affecting its growth and revenue potential.
Substantial capital expenditure and working capital requirements: The company has substantial capital expenditure and working capital requirements. Further, as it pursues its growth plan, it expects that it will have to raise additional funds by incurring further indebtedness or issuing additional equity to meet its capital expenditures or working capital needs in the future. Its sources of additional financing, in the event that it needs to draw on them to meet its working capital or capital expenditure needs, may include incurrence of debt, issuance of equity or debt securities or a combination of both. If it decides to raise additional funds through the incurrence of debt or issuance of debt securities or a combination of both, its interest and debt repayment obligations will increase, which could adversely affect its business, results of operations, cash flows and financial condition.
Stiff competition: The workspace solutions industry in India is highly competitive and it competes in both the organized and unorganized sectors with large multinational and Indian companies, as well as regional and local companies in each of the regions that it operates. Its success is largely dependent upon its ability to compete across various parameters, such as seat rates offered, quality of its centers, its brand recognition, its service levels, location of the property and the quality and scope of its VAS. In addition, its competitors may significantly increase their advertising expenses to promote their brand and centers, which may require it to similarly increase its advertising and marketing expenses and change its pricing strategies, which may have an adverse effect on its business, results of operations and financial condition.
Outlook
Indiqube Spaces provides managed, sustainable, and tech-driven workplace solutions, aiming to transform the traditional office experience for modern businesses. The company is one of the leading players in the Large and Growing Flexible Workspace Market in India. It has acquisition strategy with a focus on value creation and demand-driven locations. On the concern side, Bengaluru, Pune and Chennai collectively garnered the significant revenue from operations and any adverse developments affecting its centers in these locations, could have an adverse effect on its business, results of operations and financial condition. Moreover, the company is dependent upon third parties for supply of raw materials and effectuating interior enhancement. Any defaults or delays by these third parties may have an adverse impact on its business, results of operations, cash flows and financial condition.
The issue has been offering 3,10,44,444 shares in a price band of Rs 225-237 per equity share. The aggregate size of the offer is around Rs 698.50 to Rs 735.75 crore based on lower and upper price band respectively. Minimum application is to be made for 63 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations increased by 27.54% from Rs 8,305.73 million in Fiscal 2024 to Rs 10,592.86 million in Fiscal 2025. This was primarily due to an increase in rental income from Rs 6,803.95 million in Fiscal 2024 to Rs 8,702.50 million in Fiscal 2025. Moreover, loss after tax was Rs 1,396.17 million in Fiscal 2025, compared to Rs 3,415.08 million in Fiscal 2024.
The company’s workspace solutions span 8.40 million square feet of AUM in SBA spread across 115 properties in 15 cities as of March 31, 2025. It aims to further expand both the breadth and depth of its commercial real estate portfolio nationwide. Its growth strategy is twofold. First, it plans to extend its footprint by adding more cities, including emerging non-Tier I markets. Second, it aims to deepen its presence in existing cities by acquiring additional properties in key micro markets. Its approach involves initial focus on acquiring smaller properties (spokes) in new geographies to assess market demand and establish a local presence. By starting with smaller-scale operations, it reduces the risk of over-investment and ensure that any potential challenges can be managed on a smaller scale. Once these properties achieve breakeven and demonstrate viability, it scales up by investing in larger properties (hubs) in that market.
