Embassy Buildcon, which invested Rs 1,000 crore into WeWork India between 2017 and 2019, will get a partial exit after WeWork India management’s stake sale to Volrado Ventures and other co-acquirers, including CaratLane founder Mithun Sacheti, for Rs 1,200 crore, according to two people aware of the matter.
In a two-part deal, Embassy will also spend around Rs 700 crore from the fundraise on acquiring US-based WeWork Inc.’s 27% stake in the Indian entity.
After the acquisition, the Bengaluru-based property developer will own 100% of WeWork India. Of the total, the Embassy will sell a 40% stake to Volrado and other independent co acquirers in their individual capacity.
The firm received the Competition Commission of India approval on Tuesday for the stake sale.
Embassy Buildcon, a limited liability partnership organized and registered in India, is part of the Embassy Group.
Following the divestment, the Embassy will retain a 60% stake, including 5% as Esops, before proceeding with an initial public offering.
WeWork India will maintain rights to the brand by paying a 2% franchise fee to the global coworking company.
“WeWork will use the proceeds from the secondary sale to acquire Wework Inc.’s stake in India and repay a portion of the equity invested by the parent company, Embassy Buildcon,” said the sources quoted above.
“Due to its robust client roster, the company is currently prioritising expansion in its existing cities,” said one source. The initial public offering (IPO) plan is also progressing as scheduled. According to one of the sources quoted above, the deal will be finalised in the coming weeks following approval.
Karan Virwani, the CEO of the company, could not be reached for comment.
ET was the first to report a stake buyout discussion with WeWork Inc. in November 2023.
Within the next 18 months, Embassy Buildcon is looking to list coworking office platform WeWork India in the domestic bourses.
“WeWork is strategically focused on scaling its presence in India with a plan to add 2 million square feet of space each year. The company is executing these transactions and expects to finalise them soon,” the source said.
For the first six months of FY24, the company reported a 40% on-year growth in revenue at Rs 831 crore. Ebitda surged 90% to Rs 532 crore during the period. The company expects its revenue to increase by 30-40 percent CAGR and its bottom line to grow by 50% for FY24.
WeWork India, a private limited company registered in India, is engaged in the operation of flexible workspaces and the operation of digital real estate workplace solutions for companies. The firm has a presence across 8 cities and 55 locations, with over 70,000 members. It has 8 million sq ft of operations with around 82% occupancy, mainly led by enterprise clients.
