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

WeWork India’s forthcoming initial public offering (IPO) of ₹3,000 crore has attracted scrutiny from proxy advisory firm InGovern. The firm’s founder, Shriram Subramanian, raised several concerns regarding the IPO’s structure and pre-listing conditions, highlighting issues related to promoter intent, financial sustainability, and governance oversight.

### What’s the Deal with the IPO?

The IPO is structured as a full offer for sale (OFS), meaning no fresh capital will be infused into the company. This has triggered questions about the purpose and potential impact of the offering.

### Key Concerns Raised

#### Temporary Release of Pledged Promoter Shares

One significant red flag 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 against borrowings worth approximately ₹2,065 crore. According to Subramanian, these pledges were revoked primarily to facilitate the IPO, with an agreement that if the listing did not happen, the shares would have to be re-pledged within 45 days.

#### Financial Challenges: Operating Losses and Lease Obligations

WeWork India continues to grapple with operating cash losses. Complicating matters are lease agreements which essentially function as debt obligations for the company. Subramanian pointed out that when a loss-making firm conducts a pure OFS and promoters use the proceeds to reduce debt, it raises serious concerns.

Almost 43% of the company’s FY25 revenue was spent on lease payments. Notably, the company’s brief reported profit mainly came from a deferred-tax gain rather than operational performance.

#### Governance and Oversight Issues

InGovern highlighted repeated audit qualifications for WeWork India, signaling potential governance problems. The company reported material weaknesses in internal controls from FY22 through FY24, including poor vendor documentation and lack of transparency around related-party transactions.

Moreover, several enforcement proceedings are currently pending against WeWork India’s promoters under agencies such as the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and under the Prevention of Corruption Act.

### Market Risks: Brand Dependence

Another major risk factor flagged is the company’s dependence on the WeWork brand. WeWork India operates under a 99-year licensing agreement with WeWork Global, which is conditional on promoter control and regulatory compliance. Any conviction or change in promoter status could jeopardize these brand rights, posing an existential threat to the business.

### Despite Concerns, IPO Receives Strong Anchor Support

In spite of these warnings, the IPO has seen robust anchor investor participation, raising around ₹1,348 crore from 67 prominent investors, including ICICI Prudential Mutual Fund and HDFC Mutual Fund.

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*Investors are advised to weigh these risks carefully before participating in WeWork India’s IPO.*
https://www.newsbytesapp.com/news/business/wework-india-s-3-000cr-ipo-under-ingovern-s-scanner-here-s-why/story