Dev Information Technology-backed DevX IPO aims to meet rising demand for flexible offices

In a significant development for India’s booming flexible office space market, Dev Accelerator Limited (DevX), a company promoted by Dev Information Technology Limited, has filed its Draft Red Herring Prospectus (DRHP) for an Initial Public Offering (IPO). The IPO aims to raise fresh capital to fuel DevX’s expansion in the coworking sector, particularly in Tier 2 markets across India. DevX, which operates in over 10 cities including Ahmedabad, Vadodara, and Hyderabad, has its eyes set on further cementing its position as a key player in the coworking industry.

According to a press release issued by Dev Information Technology Limited, the IPO involves the fresh issuance of up to 2.47 crore equity shares with a face value of ₹2. The funds raised from this IPO will be used for multiple strategic purposes. The most significant portion, amounting to ₹68.95 crore, will be allocated towards outfitting new centers and securing their deposits. An additional ₹30 crore will be directed towards repaying or prepaying some of DevX’s existing loans, ensuring the company reduces its debt burden.

The ambitious expansion plans include spreading operations to new cities like Mumbai, Gurugram, Noida, Pune, and Chennai, along with a continued presence in cities where DevX is already a leader in flex-space. Experts in the sector view this IPO as a major push in an industry that has seen tremendous growth post-pandemic, driven by the rising demand for flexible office solutions.

Expansion Targets Set to Reshape India’s Flex-Space Market

DevX is currently one of India’s largest flex-space operators in Tier 2 cities, according to a report by Jones Lang LaSalle. With 25 operational centers as of August 2024, the company plans to ramp up operations in cities such as Gurugram, Pune, and Chennai, where demand for coworking spaces has surged in recent years.

Strategic Impact of Dev IT and DevX’s Partnership

The collaboration between Dev Information Technology Limited and DevX is seen as a strategic move in the fast-evolving world of business operations. By leveraging Dev IT’s expertise in Digital Transformation and Managed IT Services, DevX is poised to provide more than just office spaces—it offers an ecosystem of solutions to optimize business operations. This combination of technology and real estate positions DevX to cater to a wide range of enterprises, from startups to established corporations seeking dynamic workspace options.

Industry Experts Weigh In

Industry experts note that this IPO could not have come at a better time. With a surge in demand for flexible office spaces, driven by the rise in hybrid work models, DevX’s expansion is set to capture significant market share. According to market analysts, the proceeds from this IPO will help DevX invest in top-tier infrastructure and technology, which are vital to attracting high-end clients.

Financial Health of Dev Information Technology Limited

Dev Information Technology Limited, which was founded in 1997, has grown into a global IT services giant, offering a comprehensive range of services including Cloud Solutions, Digital Transformation, and Enterprise Applications. In FY24, Dev IT reported a revenue of ₹165.12 crore with an EBITDA of ₹15.31 crore and a profit after tax of ₹9.48 crore, showcasing its financial stability and capacity to back such a large-scale expansion. The success of this IPO is likely to further strengthen DevX’s financial position, allowing it to reinvest in technology and infrastructure.