The clarifications address multiple issues surrounding the company’s recent initial public offering (IPO), including the offer structure, financial eligibility, internal controls, and legal proceedings involving promoters.
In response to observations regarding the IPO being a 100% Offer for Sale (OFS) with no fresh capital infusion into the company, WeWork India stated that it generates sufficient free cash flow and EBITDA to fund its operations, capex, and growth. The company added that a promoter investment of Rs 5,012.81 million through a rights issue earlier in 2025 was made at a valuation higher than the IPO’s upper price band, and that current regulations permit a pure OFS.
Concerns were also raised over the company’s ineligibility under SEBI’s profitability route for IPOs. WeWork India confirmed it had filed the IPO under Regulation 6(2) of SEBI’s ICDR Regulations, applicable to companies that do not meet profitability or asset requirements. The company pointed out that other companies have previously used the same regulatory route.
Regarding the observation that WeWork India had reported a negative net worth of Rs 4,374.5 million as of March 31, 2024, the company attributed this to lease accounting norms under Ind AS 116. It explained that while lease payments affect net worth on paper, they are non-cash items and do not reflect operational performance. The company cited a net worth of Rs 1,896.82 million as of June 30, 2025, and reported an adjusted EBITDA of Rs 4,212.55 million in FY25 after accounting for lease-related cash outflows.
Addressing concerns over cash flow and debt, including the claim that lease obligations consumed 43.25% of FY25 revenue, WeWork India stated that lease payments are a fundamental cost in its asset-light business model, similar to raw material costs in manufacturing.It also stated that it had reported positive operating cash flows since FY2023 and had reduced finance costs in recent quarters. The company clarified that a significant portion of finance costs is composed of lease liability interest, which is a result of accounting treatment under Ind AS 116.On the issue of occupancy rates being below peers, WeWork India stated that even with an occupancy of 80.7%, it had delivered a healthy adjusted EBITDA margin of 21.61%, which the company described as the highest among its industry peers.
InGovern had also highlighted ongoing criminal proceedings involving promoters Jitendra and Karan Virwani, citing potential risks to the company’s governance profile. In its response, WeWork India stated that all such matters had been fully disclosed in the IPO’s offer documents under the section “Outstanding Litigation and Other Material Developments.”
The company added that the “fit and proper” criteria under SEBI’s Intermediaries Regulations do not apply to issuers such as itself. It also referenced recent court proceedings, noting that no interim relief was granted in related petitions and that certain factual omissions by complainants had been acknowledged in court.
With respect to the company’s reliance on the “WeWork” brand, which is licensed under a 99-year agreement from WeWork Global, InGovern had noted that the agreement is contingent upon promoter control.
WeWork India further confirmed this structure and stated that such licensing arrangements are standard industry practice. It also stated that the brand license remains valid as long as Embassy Buildcon LLP and the promoter group retain control, which they will continue to hold post-IPO.
Concerns had also been raised regarding technology dependencies on systems licensed from WeWork Global. The company responded that adequate disclosures were made in the offer documents and that it maintains a stable operational agreement with WeWork International.
In response to flagged audit observations relating to material weaknesses in internal financial controls over FY22–FY24, WeWork India stated that these weaknesses had been resolved by March 2025. Since there were no material weaknesses at the time of filing the Red Herring Prospectus (RHP), the company stated that no additional disclosure was deemed necessary.
On related party transactions, the company clarified that an average of 10.18% of its total expenses were with related parties, primarily covering facility management and brand or technology fees. The pricing of these transactions was said to be at arm’s length, backed by certification from an independent audit firm.
InGovern had flagged the promoter’s share pledge as a potential control risk, noting that a majority of promoter shares were previously pledged against borrowings. WeWork India confirmed that the IPO was listed within the required 45-day period following the release of pledged shares, and that the shares would not be re-pledged as a result.
The company also stated that a significant portion of the OFS proceeds, approximately Rs 1,748 crore, was used to retire the related debt, bringing down the level of pledged shares to 15%.
Addressing questions on recurring profitability, WeWork India acknowledged that the FY25 profit was primarily due to a deferred tax credit, but emphasized that adjusted EBITDA figures provide a more accurate picture of operational performance. The company reported adjusted EBITDA margins of 21.61% for FY25, 20.40% for FY24, and 14.55% for FY23.
The company also responded to observations about regional concentration of revenues, stating that Bengaluru and Mumbai are the largest office markets in India and its portfolio in these cities represents only about 2% of the overall commercial real estate stock, implying further room for expansion.
WeWork India reiterated that its offer documents were prepared in compliance with SEBI regulations and that all relevant disclosures, including those related to litigation and risk factors, had been made transparently.
The company affirmed that its operational metrics remain strong, its brand license is stable, and its promoter group retains effective control. It stated that the successful listing reflects stakeholder confidence in the business and its long-term prospects.
WeWork stated that it continues to engage with proxy advisory firms and investors to address any governance concerns raised in the public domain.
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