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U.S.-based WeWork Inc. has been given clearance to sell off its shares of WeWork India, and exit India’s markets altogether — despite the India affiliate showing overwhelmingly positive growth over the past year.
It’s reported by Business Standard that the Competition Commission of India (CCI) has approved WeWork Inc.’s sale of its 27.5% stake in the Indian subsidiary.
WeWork India is an independent entity that has rights to operate under the WeWork name in the country. WeWork India “will continue to hold the rights to use the brand name as part of the operating agreement, while serving our members, landlords, and partners as usual,” WeWork India CEO Karan Virwani has said.
The deal would involve WeWork India’s Parent company, Embassy Group, and WeWork Inc. together selling around 40% stake in WeWork India, which would mark a full WeWork exit from the Indian market.
U.S.-based WeWork Inc. has played an iconic role in popularizing shared office spaces on the international stage. The company’s financials, however, faced dramatic challenges — including a Chapter 11 bankruptcy last year. WeWork recently announced that David Tolley, who served as CEO during the company’s bankruptcy proceedings, has stepped down and has been replaced by John Santora, formerly of global real estate services company Cushman & Wakefield.
Despite these troubles, WeWork India has shown resilience, reporting significant revenue growth and cutting losses. Notably, WeWork India reported a year-over-year revenue increase of 67.58% for the fiscal year ending March 2023.
According to a report published by EnTracker, the company’s revenue increase reached Rs 1,314 crore (US$158.5 million). Additionally, it’s reported that the company also achieved a significant reduction in losses, by 77% — reducing it to Rs 146.8 crore (US$17.7 million).
The Embassy Group currently holds a 72.5% majority stake in WeWork India. It’s reported by The Economic Times that the transaction will see new investors, including the Enam group family office, investment fund A91 Partners, and Mithun Sacheti of CaratLane, acquiring a significant portion of the shares.
The CCI’s detailed order is expected to provide more insights into the specifics.
This WeWork exit comes at a time when Indian coworking space is flourishing as there has been a noticeable increase in demand for flexible workspace solutions. Awfis, another major coworking operator, has successfully gone public, and competitors like Indiqube, CoWorks, 91Springboard, and Bhive are reported to be consistently expanding.
The sale could provide WeWork Global with liquid funds as it emerges from bankruptcy under new leadership.
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