IPO Buzz: Can Smartworks Deliver Like HDB and Crysak?:-
IPO of Smart Works Corking has come in the market. So is this IPO going to make us money or not?We will do a complete review and also what is its GMP ? Can we see growth in GMP ? How are the company’s financials? How are the fundamentals? We will analyze all things in this video. Recently, investors made profit in HDB’s IPO. After that, investors have not made any profit anywhere. An IPO of Crysak came where it got listed today. Investors witnessed huge listing gains. But many people did not get the allotment there.
IPO Basics: Dates, Size, and Structure:-
About the issue size of the IPO How big is this IPO? So the issue size of the IPO is coming out to be ₹582 crores. Here we are seeing the issue size of ₹582 crore. Where the good thing is that this is going to be a fresh issue of ₹45 crores. Ok? This means that new shares will be issued with this money. Meaning the total money that will go to the company is ₹445 crores. Now, what is the company actually going to do with this money that will come to it? Where will you use it? We will talk about that later. When we understand the complete fundamentals of the company, then we will understand the rest. The remaining amount is going to be around ₹137 crores. OFS means Offer for Sale, which means shares worth this amount will be sold by its promoters in the market and this money will go to the promoters of the company or the existing shareholders. Now this IPO is going to open in the market from 10th July and it will remain open, you can apply here till 14th July. About the allotment date of the remaining IPO, it is coming out to be 15th July. Meaning, you will know the very next day whether your IPO has been sold or not. After that, if we about its listing date, then finally on 17th July, this IPO will be listed in the market. Meaning, if you make profit, if you get allotment, then you can exit by taking your profit on 17th July or you can trade the shares here. These are the basic details of the IPO.
Business Model: What Does Smartworks Do?:-
About the business of the company, what does the company do ? What is their business? Where does money come from ? After that we will analyze the financial fundamentals of our company. Then we will come back to the grey market premium. So understand it carefully because if you don’t understand the business, you won’t be able to understand the financials either. And the things that are visible in the finance, when can they improve, how can they improve, what should its market cap be, what should its valuation be ? There will be some difficulty in understanding that too. There is no need to spend money on building an office. Now whatever other facilities come along with the office, there is playing area, rest area. Whatever other things they have, they provide all these things. So simply we come to their structure. So their footprint is 10 million square feet. That means the total working space of their offices is close to 10 million square feet. Currently it is available in 14 cities in India. About their total centres, till now there are 54 centres. About the rest of the company’s clients, then its clients include Indian corporates along with MAC i.e. multinational corporations and along with this Indian startups also use its offices and most of the offices are used by the IT sector and consultancy businesses.
Revenue Growth: Strong Topline Performance:-
About the revenue So, they generated revenue of full ₹ 744 crores in 2023. Growth was seen here next year. They generated the entire revenue of ₹113 crores in 2024. In 2025 it generated a revenue of ₹1409 crores. Meaning, in terms of revenue, we are seeing good growth in the company. According to the type of their business model.
Profitability: Loss-Making But Improving:-
Profit after tax. Loss of ₹101 crore in the first year 2022 sorry 2023. Their losses here have reduced next year. It came above 49 crores and then now in the recent year their revenue has also increased. So the losses are not that much in terms of revenue. Right now the company has got some relief. So here the company has incurred a loss of ₹ 63 crores. Ok? Now let us come to the market cap of the company. What is the market capitalization of the company? Above their price band. The price band of the company’s IPO comes out to be around ₹387 to ₹47. That means, here at ₹ 47, its upper band is seen. So on the value of ₹47, the market capitalization above the price comes out to be ₹4645 crores. Meaning the company is not that big. But here the losses are huge. So here we cannot calculate the price to earning ratio of the company. See when does PE ratio happen? See when does the price to earnings ratio work? Price goes up and earnings go down. But the company has no earnings. So on which parameter will you analyze this? Here we will analyze it on the debt to equity ratio and also on the market cap to sales ratio. But first, you need to understand how much debt the company has.You will have to pay interest of Rs. Although the operating profit margin of the company is 60%. Meaning, the profit of the company is quite strong. They make up 60% of OPM. Operating profits make up the margin. In future if their debt gets reduced then their interest component will reduce due to which they will become positive. Ok? Meaning their PAT will become positive. Ok? Along with this, you will have to understand one thing. ROCE. Ok ? ROCE Return on Capital Employed comes out to be 46%. ROCE means how much money is invested in the business and how much return is being received on it. That means whatever total money is invested in their business, capital employed, that is, capital invested in the business, on that these people are earning a return of 46%.Whatever money they have invested in the business, whatever new offices they are opening, the returns and profits they are getting are quite high.
Debt Analysis: High Leverage A Concern:-
But because they have to pay huge interest on the money they have raised to expand, to open new offices and the borrowing loans they have taken. That’s why the company is loss making. Bus. The valuation of the company has to be analysed now. So we have the PE ratio but we have the market cap to sales ratio. What is the sales of the company brother? What is the market cap of ₹1400 crores? About ₹4600 crores. So their market cap to sales ratio is coming out. MS is coming out to be a total of 3.2. At a market cap to sales ratio of 3.2, the valuation is not expensive.
Other Key Financial Ratios:-
But the valuation becomes expensive because their debt to equity ratio is three times that of three. But here comes another twist because the offices of the company are very profitable. We are making a lot of profits. So eventually in future, their borrowings can reduce significantly because they are getting high returns on the new expansion and capex they will do. So finally now we come to the grey market premium of the company i.e. above GMP. So the upper band of the IPO is coming out to be ₹47 and its grey market premium i.e. GMP at the current time is total ₹28 and this IPO is yet to open in the market tomorrow. What generally happens in IPOs now ? When the subscription of QIBS comes, then after the subscription of QIB, we see an increase in its grey market premium. So we will get to know all the things about the grey market premium when this IPO opens in the market and the way the QIB shows interest in it, everything will become clear. In percentage form, currently it is appearing to be 7%. Meaning there are chances of profit here.