**Should You Be Worried About WeWork India’s ₹3,000 Crore IPO?**

*By Dwaipayan Roy | Oct 07, 2025, 08:02 PM*

WeWork India’s ₹3,000 crore initial public offering (IPO) has recently come under scrutiny by proxy advisory firm InGovern. Shriram Subramanian, the founder of InGovern, has raised several concerns regarding the IPO’s structure and pre-listing conditions, citing potential issues around promoter intent, financial sustainability, and oversight.

### Key Highlights of the IPO

The IPO is structured as a full offer for sale (OFS) with no fresh capital being infused into the company. This approach has attracted attention, especially given WeWork India’s current financial and governance challenges.

### Concerns Over Promoter Share Pledges

One major red flag highlighted by InGovern is the temporary release of pledged promoter shares prior to the IPO. Over 53% of WeWork India’s pre-IPO shares held by Embassy Buildcon were pledged as collateral against borrowings amounting to approximately ₹2,065 crore.

Shriram Subramanian explained that these pledges were revoked mainly to facilitate the IPO. However, under the agreement terms, if the listing had not happened, the shares would have to be re-pledged within 45 days, indicating a potential risk for investors.

### Financial Challenges Persist

WeWork India continues to incur operating cash losses, which are further complicated by lease agreements that resemble debt obligations. Subramanian pointed out the risks involved when a loss-making company opts for a pure OFS, with promoters using the proceeds primarily to deleverage rather than for growth.

In FY25, nearly 43% of the company’s revenue went towards lease payments. The company’s brief profit reported was mainly due to a deferred tax gain rather than operational performance, signaling underlying financial stress.

### Governance Issues Raise Red Flags

InGovern also noted repeated audit qualifications over the years, highlighting material weaknesses in WeWork India’s internal controls from FY22 to FY24. Issues pointed out include poor vendor documentation and lack of transparency in related-party transactions.

Furthermore, multiple enforcement proceedings are ongoing against WeWork India’s promoters, involving agencies such as the CBI, ED, and authorities under the Prevention of Corruption Act. These legal challenges pose additional risks to the company’s governance profile.

### Market Risks: Dependence on Brand Licensing

The company’s reliance on the WeWork Global brand is another significant risk. WeWork India operates under a 99-year license from WeWork Global, which is contingent on promoter control and compliance with specified agreements.

Any adverse legal outcomes or changes in promoter control could jeopardize these brand rights, posing an existential threat to the company’s future operations and market positioning.

### Strong Anchor Investor Response

Despite these challenges, the IPO attracted strong interest from anchor investors. A total of ₹1,348 crore was raised from 67 investors, including prominent mutual funds like ICICI Prudential Mutual Fund and HDFC Mutual Fund.

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**Conclusion**
While WeWork India’s IPO has garnered significant market interest, potential investors should carefully weigh the highlighted concerns around financial health, governance issues, and promoter-related risks before making investment decisions.
https://www.newsbytesapp.com/news/business/wework-india-s-3-000cr-ipo-under-ingovern-s-scanner-here-s-why/story