**Should You Be Worried About WeWork India’s ₹3,000 Crore IPO?**
*By Dwaipayan Roy | Oct 07, 2025, 08:02 PM*

WeWork India’s upcoming ₹3,000 crore initial public offering (IPO) has come under scrutiny from proxy advisory firm InGovern. The firm’s founder, Shriram Subramanian, has raised several concerns about the IPO’s structure and the conditions preceding the listing. According to him, these issues raise important questions about the promoters’ intent, the company’s financial sustainability, and overall governance oversight.

### Key Concern: Full Offer for Sale With No Fresh Capital Infusion

The WeWork India IPO is structured as a full offer for sale (OFS), meaning no new capital will be infused into the company through this process. Instead, the existing promoters and shareholders will sell their stakes to new investors.

### Temporary Release of Pledged Promoter Shares

One of InGovern’s major worries centers around the temporary release of pledged promoter shares before the IPO. Over 53% of WeWork India’s pre-IPO shares held by Embassy Buildcon had been pledged against borrowings of approximately ₹2,065 crore.

Shriram Subramanian explained, “The pledges were revoked mainly to facilitate the IPO. As per their agreement, if the listing didn’t happen, the shares would have to be re-pledged within 45 days.” This temporary un-pledging raises red flags about financial maneuvering ahead of the offering.

### Continuing Financial Challenges

WeWork India has been grappling with operating cash losses, further complicated by lease agreements that function effectively as debt obligations. Almost 43% of the company’s FY25 revenue went towards lease payouts.

Subramanian noted, “When a loss-making company does a pure OFS and promoters use it to deleverage, it raises a big concern.” He also pointed out that the company’s brief profit during this period was mainly due to a deferred tax gain rather than from operational strength.

### Governance Issues and Pending Enforcement Proceedings

InGovern highlighted repeated audit qualifications as a potential warning signal for investors. The company has reported material weaknesses in internal controls from FY22 to FY24, including poor vendor documentation and a lack of transparency in related-party transactions.

Further adding to concerns, several enforcement proceedings are ongoing against WeWork India’s promoters under the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and the Prevention of Corruption Act.

### Market Risks: Dependence on WeWork’s Brand

Another risk factor flagged relates to the company’s dependence on the WeWork brand. The 99-year license from WeWork Global is contingent on promoter control and regulatory compliance. Any conviction or change in promoter management could jeopardize brand rights, posing an existential threat to WeWork India’s business model.

### Strong Anchor Investor Response Despite Concerns

Despite these red flags, the IPO attracted strong anchor investor participation. A total of ₹1,348 crore was raised from 67 investors, including prominent names like ICICI Prudential Mutual Fund and HDFC Mutual Fund.

—

**Summary:**
While WeWork India’s ₹3,000 crore IPO has garnered significant investor interest, several structural, financial, and governance concerns highlighted by proxy advisory firm InGovern warrant cautious evaluation. Potential investors should carefully weigh the implications of promoter share pledging, ongoing cash losses, governance issues, and brand dependency before making investment decisions.
https://www.newsbytesapp.com/news/business/wework-india-s-3-000cr-ipo-under-ingovern-s-scanner-here-s-why/story