Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
WeWork is gearing up to sell its 27% stake in WeWork India, its Indian subsidiary, for a substantial sum of Rs 1,200 crore (or nearly $144.58 million), according to a report published by The Economic Times.
It’s suggested by unnamed sources that this secondary deal involves prominent investors such as the Enam group’s family office, A91 Partners, and CaratLane’s founder Mithun Sacheti.
Bengaluru-based real estate developer Embassy group holds a reported 73% stake in WeWork India — a joint venture with U.S.-based WeWork which holds the remaining 27% stake. It’s reported that the potential deal would see Embassy Group offload another 13% to the group of new investors.
Speculation of a large buy back really took off in November 2023, when Business Standard reported that the Virwani family, who run Embassy Group, were considering the buy back of the 27% stake in WeWork India currently owned by the struggling WeWork.
Unlike the North American-based company seeking to emerge from chapter 11 bankruptcy, India-based WeWork has demonstrated remarkable performance last year. According to a report published by EnTracker, WeWork India’s company revenue reached Rs 1,314 crore ($158.5 million). Additionally, the company also achieved a significant reduction in losses, by 77% — reducing it to Rs 146.8 crore ($17.7 million).
Notably, the Economic Times reports that in FY2023 WeWork India experienced a 68% year-on-year increase in revenues, while also managing to reduce its losses by 80%.
A full-on buy back would further solidify Embassy Group’s position in India’s rapidly expanding flexible office market, which is predicted to be worth nearly $3 billion by 2029, according to a study published by Modor Intelligence.
Moreover, the Indian arm of WeWork is reported to have established a strong presence across major cities in the country — boasting an extensive portfolio of 8 million sq ft of office space while catering to over 70,000 paying members.
The potential for a significant stake sale comes at a time when unnamed sources close to the North American WeWork shared last week that the company is in dire need of fresh capital — if it plans to successfully emerge from bankruptcy by May 31. According to The Financial Times, WeWork requires as much as $400 million to viably emerge from bankruptcy.
This dramatic need for fresh capital has ousted cofounder and ex-CEO of WeWork Adam Neumann, along with his new venture Flow, prepared to outbid any offer for WeWork by a reported 10%, with sources sharing with CNBC that this amount could be upwards of $900 million.
In WeWork India’s case, the Economic Times reports that the potential transaction is currently awaiting clearance from the Competition Commission of India.
Regardless of the outcome, the coworking sector in India will experience further growth and innovation. A potential buy out of WeWork India could mark a significant milestone.
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