The Competition Commission of India (CCI) has approved the proposal for US based WeWork Inc to divest its stake in WeWork India. This decision, outlined in a circular issued on June 18, 2024, will allow WeWork Inc to exit its Indian operations.
The approved acquisitions proceed in two strategic steps.
Firstly, Real Trustee Advisory Company Private Limited (Real Trustee), acting as trustee for Volrado Venture Partners Fund II (Volrado II) and Volrado Venture Partners Fund III – Beta (Volrado III), along with other independent co-acquirers, will acquire certain share capital of WeWork India from Embassy Buildcon, on a fully diluted basis.
The second step involves Embassy Buildcon’s acquisition of 100% share capital of OAW from WeWork International Limited. This move will result in Embassy Buildcon indirectly holding shares in WeWork India through OAW, maintaining a majority shareholding in WeWork India, on a fully diluted basis.
This development comes seven months after SoftBank-backed WeWork Inc filed for Chapter 11 bankruptcy in the US in November 2023.
Contrasting its struggles in the US, WeWork India has demonstrated robust performance, recording a 68% year-on-year revenue increase to INR 1,300 crore for the financial year 2022-23.
Additionally, the company’s losses narrowed by 80% year-on-year to INR 146 crore during the same period.
Since entering the Indian market, WeWork India has secured approximately INR 2,000 crore in funding across various rounds.
The company continues to thrive, offering flexible workspaces across multiple locations and earmarking INR 400 crore annually for capital expenditure aimed at significant expansion in major cities.
Plans include adding nearly 2 million square feet of office space each year in the top seven to eight cities.
This development occurs amidst a resurgence in demand for coworking spaces post-pandemic. Notably, WeWork India’s competitor, Awfis, recently went public with a debut on the BSE, achieving an oversubscription rate of 108X and listing at a 12.8% premium over its issue price.
The CCI’s approval marks a pivotal transition for WeWork India, poised to continue its growth trajectory under new ownership while solidifying its presence in the dynamic coworking market.
