Business Profile of the Indiqube Spaces Limited
Indiqube Spaces is managed workplace Solutions Company, led by experienced management since 1999. The company offers comprehensive, sustainable, and technology-driven solutions to transform the traditional office experience. They provide large corporate offices, small branch offices, and value-added services for enterprises and their employees. The company manages a portfolio of 103 centers across 13 cities, covering 7.76 million square feet of area under management (AUM) in super built-up area (SBA).
The company's supply acquisition strategy prioritizes acquiring full buildings in high-demand micro-markets with robust infrastructure connectivity, low vacancy rates, and strong talent catchments. They partner with landlords to lease new properties and transform non-institutional and aging Grade B properties into high-quality, green, and modern workspaces.
Indiqube Spaces Limited IPO Objective
As per the draft red hearing prospects, the IPO issue consists only of offer for sale.
- The OFS consists of up to XXXX Equity Shares aggregating up to Rs. 4, 400 million. Nothing from those proceeds of OFS will be allotted to company.
- Indiqube Spaces IPO offer only has fresh issue of Rs. 10, 600 million. As per DRHP document, the company aims to utilize IPO proceedings towards investment in subsidiary for payment of certain borrowings, funding its working requirement, for acquisition and general corporate purposes.
| Particulars | Estimated Amount |
| Funding capex towards establishment of new center | 4626.49 |
| Payment of certain borrowings | 1000 |
| General corporate purposes | XXXX |
(₹ Million)
IPO Details of Indiqube Spaces Limited:
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹1 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to XXXX Equity Shares |
| Aggregating up to ₹8, 500 million | |
| Fresh Issue | Up to XXXX Equity Shares |
| Aggregating up to ₹7, 500 million | |
| Offer For Sale | Up to XXXX Equity Shares |
| Aggregating up to ₹1, 000 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not less than 75% of the Net Issue |
| Retail Shares Offered | Not more than 10% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
Issue Price & Size: Indiqube Spaces Limited IPO
The issue price of Indiqube Spaces Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has both fresh issue of Rs. 440 crores as well as offer for sale of Rs. 1060 crores.
Launch Date of Indiqube Spaces Limited IPO
The IPO opening date of Indiqube Spaces hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Indiqube Spaces Limited Financial Statements
| Particulars | 3-Mon period ended June 30, 2024 | FY24 | FY23 | FY22 |
| Income | ||||
| Revenue from operations | 2422.65 | 8305.73 | 5797.39 | 3441.11 |
| Other income | 90.36 | 370.87 | 215.7 | 111.31 |
| Total income | 2513.01 | 8676.6 | 6012.75 | 3552.42 |
| Expenses | ||||
| Purchases of traded goods | 110.98 | 389.76 | 278.49 | 107.78 |
| Employee benefits expense | 169.04 | 637.68 | 435.29 | 297.53 |
| Finance costs | 741.65 | 2560.02 | 1880.08 | 1434.2 |
| Depreciation and amortisation expense | 1182.14 | 3922.43 | 2981.5 | 2211.92 |
| Other expenses | 702.17 | 5014.93 | 2705.7 | 1740.94 |
| Total expenses | 2905.98 | 12524.82 | 8292.06 | 5792.37 |
| Loss after tax | -420.4 | -3415.8 | -1981.09 | -1883.79 |
| Total comprehensive loss for the period | -421.1 | -3417.36 | -1978.97 | -1889.27 |
| Particulars | Units | 3-Mon ended June 30, 2024 | FY24 | FY23 | FY22 |
| Financial KPIs | |||||
| Total income | ₹ | 2513.01 | 8676.6 | 6012.75 | 3552.42 |
| Revenue from operations | ₹ | 2422.65 | 8305.73 | 5797.38 | 3441.11 |
| Loss before tax | ₹ | -392.97 | -3848.22 | -2279.31 | -2239.95 |
| Loss before tax margin | % | -15.64 | -44.35 | -37.91 | -63.05 |
| Loss after tax | ₹ | -420.4 | -3415.08 | -1981.09 | -1883.79 |
| Loss after tax margin | % | -16.73 | -39.36 | -32.95 | -53.03 |
| EBITDA | ₹ | 1530.82 | 2634.23 | 2582.27 | 1406.17 |
| EBITDA (Operational) | ₹ | 1440.46 | 2263.36 | 2366.9 | 1294.86 |
| EBITDA margin (Operational) | % | 59.46 | 27.25 | 40.83 | 37.63 |
| Cash EBIT | ₹ | 237.4 | 1133.23 | 477.03 | 408.73 |
| Cash EBIT margin | % | 9.8 | 13.64 | 8.23 | 11.88 |
| Brokerage expenses to Revenue from operations | % | 2.89 | 2.07 | 1.94 | 1.85 |
| Net Debt | ₹ | 2057.84 | 1635.67 | 6127 | 3628.76 |
| Capital employed | ₹ | 2958.93 | 2942 | 3045.99 | 2243.39 |
| Return on Capital Employed | % | 32.09 | 38.52 | 15.66 | 18.22 |
| Operational KPIs | |||||
| Active Stock | Million square feet | 6.12 | 5.52 | 4.39 | 3.34 |
| Number of seats (under active stock) | Number | 135915 | 122766 | 97537 | 74113 |
| Centres (under active stock) | Number | 93 | 84 | 70 | 54 |
| Cities (under active stock) | Number | 12 | 12 | 10 | 8 |
| Rentable seats | Number | 122900 | 118530 | 94410 | 62810 |
| Rentable area | Million square feet | 5.53 | 5.33 | 5.25 | 2.83 |
| Occupied seats | Number | 99250 | 95076 | 79002 | 51793 |
| Occupied area | Million square feet | 4.47 | 4.28 | 3.54 | 2.33 |
| Occupancy | % | 80.76 | 80.21 | 83.68 | 82.46 |
| Steady state occupancy | % | 91 | 90.06 | 93.5 | 81.59 |
| Revenue - Multi-center clients | % | 35.21 | 40.43 | 35.16 | 20.17 |
| Average Monthly Net churn rate | % | -0.25 | -0.09 | 1 | -0.24 |
Indiqube Spaces Limited Promoters & Shareholding
As of date, there are three promoters of the company. The promoter in aggregate collectively holds 62.83% of the paid-up share capital of company.
| Name of Promoter | No. of Equity Shares | % of Equity Share held on fully diluted basis | Selling Shareholder |
| Rishi Das | 3,46,46,225 | 18.84 | Aggregating up to ₹500.00 million |
| Meghna Agarwal | 3,46,46,154 | 18.84 | Aggregating up to ₹500.00 million |
| Anshuman Das | 4,62,42,229 | 25.15 |
Should You Subscribe to Indiqube Spaces Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Indiqube Spaces Limited:
Leading players in flexible workspace market in India
India's flexible workspace stock is over 79 million square feet, with 85% of this stock spread across Tier-I markets. Demand for flexible workspaces in non-Tier I cities is growing. Bengaluru is the largest commercial office and flexible workspace market in India, accounting for over 30% of the total stock among Tier-I cities. The market is growing due to upscaling of centers and a shift towards highly amenitized formats for office development.
A comprehensive footprint spans 13 cities, including seven Tier-I and six non-Tier I cities, offering a portfolio of workspace leasing and virtual assistant services (VAS). As of June 30, 2024, the company served over 737 clients across various sectors, including IT/IT enabled services, manufacturing, automotives, engineering, aviation, banking, financial services, consulting, e-commerce, logistics, pharmaceuticals, and healthcare.
Acquisition strategy
The company has around 83% portfolio of properties in key micro markets of India. These properties provide valuable market information and enable the company to respond to market opportunities. The company's portfolio includes properties in close proximity to metro stations and the occupancy rate of steady state centers. The company also renovates and upgrades older Grade-B properties in central business districts, making up 31.67% of its total portfolio.
| Distance from Metro Station | Proximity to Operational Metro Stations | Proximity to Planned Metro Stations | ||
| Number of Centers | % Centers | Number of Centers | % Centers | |
| Up to 3 kilometers | 41 | 39.81 | 43 | 41.75 |
Prudent business management
As of June 30, 2024, 67.82% of their portfolio consists of full buildings, with many properties in hub and spokes clusters. Their property lease structures align with client lock-ins, ensuring operational stability and minimizing risks associated with early lease terminations. The lease structure also allows for effective revenue escalation provisions, ensuring predictable cash flows and financial stability. The payback period for operators is expected to be 48 to 49 months, while companies payback period is 35 months.
As of June 30, 2024, 27.05% of occupied area was from multiple center clients. Low churn rates reflect prudent business management practices, including technology-driven employee engagement programs and continuous improvement of offerings.
Their internal business development team has minimized reliance on brokers, keeping brokerage expenses as a percentage of revenue from operations to less than 2.89%. Their manpower utilization has improved, resulting in reduced salaries as a percentage of operational revenue.
Capital efficient model
The company has adopted an asset-light model, focusing on leasing rather than owning properties, allowing for 10-year leases with a three-year lock-in period, extendable for another 10 years. This model ensures flexibility and control in arrangements with lessors, while maintaining termination rights in leases.
| Clients | 3-Mon ended June 30, 2024 | FY24 | FY23 | FY22 |
| % of revenue from operation | ||||
| Top client | 3.67 | 4.33 | 4.15 | 7.54 |
| Top 5 clients | 12.82 | 14.85 | 15.34 | 19.15 |
The company maintains a well-diversified client base across industries and regions, minimizing risks associated with client concentration. The top client accounts for 3.67% of the company's revenue, while the top five clients collectively contribute 12.82%.
Future strategies
- Expanding the footprint by adding more cities and deepening presence in existing cities
- Acquiring smaller properties in new geographies to assess market demand and establish a local presence.
- Collaboration with landlords using a managed aggregation model and expanding operating footprint
- Enhance Average Revenue Per Square Feet through cross-selling opportunities
- Become a Preferred Workspace Outsourcing Solutions Partner for Enterprises
- Expand beyond its workspace solutions ecosystem by offering a suite of SaaS products
- Integrate immersive and tech-forward solutions while maintaining cost-efficiency and scalability.
Risk Factors of Indiqube Spaces Limited:
Geographical concentration page 40
Indiqube Spaces business is intrinsically linked to the dynamics of the real estate market. Fluctuations in the market can lead to higher operational expenses, eroded profit margins, and deter expansion plans. Occupancy rates are also affected by market fluctuations, with lower property values potentially leading to decreased demand or increased vacancy rates.
As of June 30, 2024, they have presence in 13 Indian cities, including Bengaluru, Pune, and Chennai, constituted major share of their total revenue. Any slowdown in demand by takers due to execs competition or otherwise can lead to decrease in revenue from their cities. Changes in demographic patterns, disruptions due to economic factors, or changes in state policies could significant disrupt business strategies and may require significant capital expenditure.
| Location | 3-Mon ended June 30, 2024 | FY24 | FY23 | FY22 |
| % of Revenue from Operations | ||||
| Bengaluru, Karnataka | 65.99 | 66.61 | 76.53 | 83.67 |
| Pune, Maharashtra | 13.53 | 14.97 | 12.45 | 13.98 |
| Chennai, Tamil Nadu | 12.07 | 10.23 | 4.2 | 0.86 |
| Coimbatore, Tamil Nadu | 2.81 | 2.72 | 1.86 | 0.03 |
| Gurugram, Haryana | 1.48 | 1.4 | 0.88 | 0.06 |
| Mumbai, Maharashtra | 1.22 | 1.4 | 2.04 | - |
| Hyderabad, Telangana | 1 | 1.09 | 1.09 | 0.54 |
| Occupancy (%) | 80.76 | 80.21 | 83.68 | 82.46 |
History of losses
The company has experienced losses in the past and they are responsible for lease payments to lessons even if the space remains vacant. If clients terminate their agreements, cash flows and ability to make payments may be affected. The company does not own the properties where its centers are located. If real estate costs decrease, the company may not be able to lower fixed monthly payments and at same time may charge in lower rates as per market rates from occupants which may affect their bottom line..
| Particulars | 3-Mon ended June 30, 2024 | FY24 | FY23 | FY22 |
| Percentage of total income | ||||
| Total comprehensive loss for the year | -16.76 | -39.39 | -32.91 | -53.18 |
If the company is unable to increase occupancy are with premium prices, the history of loss may continue.
Value added services
The company offers a range of bundled and decoupled workplace solutions and value-added services (VAS) for various clients. The revenue from Value added services represent a significant chunk of its revenue. Decrease in future demand of VAS could negatively impact the business operations and overall cash flows. VAS requires adhering to statutory requirements and internal standard operating procedures.
Improper handling of food and beverage products, as well as cleaning and housekeeping services, can have adverse impacts on employees and the environment. The company's success depends on its reputation for quality services, safety record, and client relationships.
| Particulars | 3-Mon ended June 30, 2024 | FY24 | FY23 | FY22 |
| (% of revenue from operations) | ||||
| Workspace leasing | 88.54 | 89.29 | 88.87 | 90.41 |
| VAS | 11.73 | 11.1 | 11.76 | 10.22 |
Continue growth and attain new clients
Maintaining and managing rapid growth of past may place a significant strain on existing financial resources. As the company continues to invest in additional centers, launch additional VAS, hire additional employees, and increase marketing efforts, it may discover that its internal processes are ineffective or inefficient.
| Tenure | Three months period ended June 30, 2024 | FY24 | FY23 | FY22 | ||||
| No. of clients | % of occupied square feet | No. of clients | % of occupied square feet | No. of clients | % of occupied square feet | No. of clients | % of occupied square feet | |
| Less than 12 months | 249 | 8.01 | 224 | 7.23 | 170 | 6.35 | 154 | 8.16 |
| 12 - 23 months | 64 | 5.08 | 62 | 4.58 | 54 | 4.37 | 30 | 3.37 |
| 24 Months or more | 424 | 86.91 | 416 | 88.2 | 370 | 89.28 | 264 | 88.47 |
Continued growth could also strain the ability to maintain reliable service levels for clients. The ability of the management to source sufficient reasonably priced opportunities for new centers or develop and launch additional solutions and VAS may become more limited. If not managed effectively, increases in capital expenditures and operating expenses could outpace any increases in revenue.
Indiqube Spaces Limited Grey Market premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Indiqube Spaces Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
