AWFIS Space

Leadership in a large and growing marketplace.

Innovating in the flexible workspace industry with the adoption of its MA model.

Diverse space sourcing and demand strategies.

Growth through an integrated platform approach.

Delivering strong financial and operating metrics;

Its experienced and diverse senior management team.

The company has a history of net losses, negative earnings per share ("EPS") and return on net worth ("RoNW"). The company need to generate and sustain increased revenues while managing its expenses to achieve profitability, and its inability to achieve these goals may have an adverse effect on its business, results of operations, cash flows and financial condition.

The company has experienced negative cash flows in previous Fiscals and may continue to have negative cash flows in the future.

Its business has grown rapidly, including the company revenue from contract with customers that has grown at a CAGR of 74.85% from Rs.1,783.60 million in Fiscal 2021 to Rs.5,452.82 million in Fiscal 2023, and its may fail to manage its growth effectively.

Its growth may be negatively impacted by macroeconomic factors.

The company may not be able to attract new clients in sufficient numbers, continue to retain existing clients, a portion of whom enter into service agreements ("Client Agreements") with short-term commitments, or agree sufficient rates to sustain and increase its client base or at all.

The company enter into Space Owner Agreements to render operation and marketing services in relation to its managed aggregation ("MA") centers and are subject to risks related to such Space Owner Agreements.

Its MA model requires the company to identify, partner with space owners and agree to profit or revenue sharing models with these owners. Its cannot assure you that the company will be able to attract new space owners on favorable terms in order to grow its business and overall profitability.

The company may incur additional capital expenditure under its MA model to attract new clients and retain existing clients, which may impact its cash flows and profitability.

The company relies on its customer relationships to grow its business and generate revenues. Any negative customer experience may impact its ability to attract or retain clients and impact its growth and profitability.

The company has entered into long-term fixed cost leases, i.e., SL for 1.94 million sq. ft. covering 62 total centers across 11 total cities and 9 states and 33.57% of its total seats as of December 31, 2023, which may result in adverse impact in its liquidity, results of operations, cash flows and profitability.

As of December 31, 2023, 67.82% of its rental income from co-working spaces was derived from centers located in Bangalore, Mumbai, Pune and Hyderabad. Accordingly, a significant portion of its revenues from co-working spaces are derived from centers concentrated in a few cities and any adverse developments affecting such centers, cities or regions could have an adverse effect on its business, results of operations and financial condition.

The company faces significant competitive pressures in its business. The company`s inability to compete effectively would be detrimental to its business and prospects for future growth.

The company has substantial capital expenditure and working capital requirements and may require additional financing to meet those requirements, which could have a material adverse effect on its results of operations, cash flows and financial condition.

The company is subject to risks inherent in the SL model, which its may not be able to mitigate, and as a result, the company`s business, results of operations, cash flows and financial condition may be adversely affected.

The company has certain commitments, which, if they materialize, may adversely affect its results of operations, financial condition and cash flows.

Its inability to repay the company outstanding borrowings could adversely affect its business, results of operations and financial condition.

The company does not own the land and buildings at any of its centers. Any defect in the title and ownership of the land and building where its centers are located may result in the company centers being shut down, result in relocation costs for it and termination of its Client Agreement, which may adversely impact the company`s results of operations and profitability.

Operational risks are inherent in its business as it includes rendering services at high quality standards at its centers. A failure to manage such risks could have an adverse impact on its business, results of operations, cash flows and financial condition.

The company is exposed to risks associated with the development and construction of the spaces its occupy.

Its Registered and Corporate Office are operated on leased premises and its inability to renew such lease agreement may adversely affect its business, results of operations and financial condition.

The company will not receive any proceeds from the Offer for Sale portion.

The objects of the Fresh Issue for which the funds are being raised have not been appraised by any bank or financial institutions. Any variation in the utilization of its Net Proceeds as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders` approval.

The objects of the Fresh Issue include funding working capital requirements, which is based on certain assumptions and estimates. Any failure in arranging adequate working capital for its operations may adversely affect the company`s business, results of operations, cash flows and financial conditions.

The Company is involved in certain legal proceedings. Any adverse decision in such proceedings may render it liable to liabilities / penalties and may adversely affect its business, financial condition, results of operations and cash flows. The Company is involved in certain legal proceedings. Any adverse decision in such proceedings may render us liable to liabilities / penalties and may adversely affect its business, financial condition, results of operations and cash flows.

The company is subject to government regulation in the jurisdictions in which the company operates. Any non-compliance with, or changes in, regulations applicable to it may adversely affect its business, results of operations, cash flows and financial condition.

Its inability to protect or use the company intellectual property rights may adversely affect its business. The company may also unintentionally infringe upon the intellectual property rights of others, any misappropriation of which could harm its competitive position.

In the event the company fails to obtain, maintain or renew its statutory and regulatory licenses, permits and approvals required to operate its business, including due to any default on the part of the owners of the properties the company lease and manage, its business, cash flows and results of operations may be adversely affected.

The company is required to receive or renew certain approvals or licenses required in the ordinary course of business or to commence new businesses. Failure to obtain or maintain or renew licenses, registrations, permits and approvals may adversely affect its business, cash flows and results of operations.

Certain of its Group Companies are involved in legal and regulatory proceedings. Any adverse outcome of such proceedings, or initiation of similar actions or proceedings against its Group Companies may result in negative publicity in relation to its Individual Promoter and the Company.

The company has experienced delays in payment of certain statutory dues including employee state insurance corporation contributions, provident fund contributions and income tax payments in the past.

Its operations entail certain fixed expenses, and the company`s inability to reduce such costs during periods of low demand for its solutions may have an adverse effect on its business, results of operations, cash flows and financial condition.

Its financing agreements contain covenants that limit the company flexibility in operating its business. If the company is not in compliance with certain of these covenants and are unable to obtain waivers from the respective lenders, its lenders may accelerate the repayment schedules, and enforce their respective security interests, leading to a material adverse effect on its business and financial condition.

Its operations are dependent on the company`s ability to attract and retain qualified personnel, including its Key Managerial Personnel and Senior Management Personnel and any inability on its part to do so, could adversely affect its business, results of operations and financial condition.

If the company fail to maintain an effective system of internal controls, its may not be able to successfully manage, or accurately report, its financial risks. Despite the company internal control systems, its may be exposed to operational risks, including fraud, petty theft and embezzlement, which may adversely affect its reputation, business, financial condition, results of operations and cash flows.

A portion of its new clients originate from brokers. In the event such companies continue to gain market share compared to its direct booking channels or its competitors are able to negotiate more favorable terms with such brokers, its business, cash flows and results of operations may be adversely affected.

Any failure of its information technology systems could adversely affect its business and the company`s operations.

The COVID-19 pandemic has had a material and adverse impact on its business and operations, and it may continue to have an adverse effect on its business prospects, cash flows and future financial performance.

Its increased focus on construction and fit-out projects exposes the company to risks inherent in such projects, and could adversely affect its business, prospects, results of operations, financial condition and cash flows.

Any inability to expand its business into new regions and markets in India could adversely affect its business, prospects, results of operations, financial condition and cash flows.

As the company expand its business into new regions and markets in India, the sub-optimal performance of its new centers could adversely affect its business, prospects, results of operations, financial condition and cash flows.

Its operations could be adversely affected by strikes, work stoppages or increased wage demands by its employees or any other kind of disputes with the company employees.

Its insurance coverage may not be adequate to protect the company against all potential losses, which may have a material adverse effect on its business, financial condition, cash flows and results of operations.

The company relies on contract labor for carrying out certain of its operations and the company may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on its results of operations, cash flows and financial condition.

The company is exposed to a variety of risks associated with safety, security and crisis management.

The company has commissioned an industry report from CBRE South Asia Private Limited, which has been used for industry related data in this Red Herring Prospectus.

The auditors` report on its Restated Consolidated Financial Information as at and for the Financial Year 2021 refers to an emphasis of matter paragraph, the company cannot assure that its financial information for future periods will not contain emphasis of matters or qualifications.

The company has received complaints in relation to certain aspects on its DRHP post the filing of its DRHP which have been responded to.

Its Promoters will continue to retain significant shareholding in the Company after the Offer, which will allow them to exercise influence over the company.

Its Directors and Promoters may enter into ventures which are in businesses similar to the company.

The company has entered, and will continue to enter, into related party transactions which may involve conflicts of interest. Further, its Individual Promoter, Directors and Key Managerial Personnel have interests in it other than reimbursement of expenses incurred and normal remuneration or benefits.

One of its Promoters, Peak XV, does not possess adequate experience and has not actively participated in the business activities undertaken by the Company.

The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares upon listing on the Stock Exchanges. Further, the current market price of some securities listed pursuant to initial public offerings which were managed by the Book Running Lead Managers in the past, is below their respective issue prices.

The company has presented certain supplemental information of its performance and liquidity which is not prepared under or required under Ind AS.

Significant differences exist between Ind AS and other accounting principles, such as US GAAP and International Financial Reporting Standards ("IFRS"), which investors may be more familiar with and consider material to their assessment of its financial condition.

Annualized financial data contained in this Red Herring Prospectus may not reflect its future performance.

Pursuant to listing of the Equity Shares, its may be subject to pre-emptive surveillance measures like Additional Surveillance Measure (ASM) and Graded Surveillance Measures (GSM) by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors.