WeWork Inc.: Stake Sale in India Fails Despite Approval
WeWork Inc.’s efforts to divest its 27% stake in WeWork India and exit the Indian market have collapsed, even after securing approval from the Competition Commission of India (CCI). The decision stems from a significant valuation mismatch, even after the deal was cleared by regulatory authorities.
Originally, the plan involved WeWork Inc. collaborating with its local partner, Embassy Group, which holds a 73% stake in WeWork India, to sell a combined 40% stake to a consortium of investors. The consortium included the Enam Group family office, A91 Partners, and CaratLane founder Mithun Sacheti in a Rs 1,200 crore secondary transaction. However, the selling parties were reluctant to proceed at the previously agreed valuation, especially after the recent successful public offering by rival coworking firm Awfis, which was oversubscribed 108 times.
Karan Virwani, CEO of WeWork India, is now in discussions with 360 One (formerly IIFL) to explore purchasing part of WeWork Inc.’s stake. The Embassy Group aims to secure financing from 360 One by leveraging its shareholding.
Despite WeWork Inc.’s bankruptcy filing in November 2022 and a change in management, the Indian coworking sector shows signs of recovery. WeWork India reported a revenue of Rs 831 crore for the first half of FY24, marking a 40% year-on-year increase. The coworking market in India has seen growth, with competitors like Indiqube and Awfis also reporting significant revenue increases.
This setback for WeWork Inc. highlights the complexities of navigating the Indian market and the impact of evolving valuations amid a competitive landscape. As the office-sharing sector continues to grow, companies will need to adapt to changing market conditions and investor sentiment.
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