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IPO Details

• IPO Opening Date: September 10, 2025
• IPO Closing Date: September 12, 2025
• IPO Size: ₹143.35 crores Entirely a fresh issue.
• IPO Price Band: ₹56.00 to ₹61.00
• Lot Size: 235 shares
• Allocation Investors: QIB: ~75% ; NII: 15% Retail: 10%
• Lead Managers: Pantomath Capital Advisors Pvt. Ltd.
• Registrar: Kfin Technologies Ltd.

About the Company

• Dev Accelerator Limited, known as DevX, was established in 2017. The company provides flexible office spaces, including coworking environments, and managed office space solutions.
• It operates over 28 centers across 11 cities in India, with its first international center planned in Sydney.
• Main products/services: Managed office solutions, co-working space solutions, design and build solutions, facility management services, payroll management, and IT/ITeS services.
• It has 28 centers across 11 cities (Delhi-NCR, Hyderabad, Mumbai, Pune, Ahmedabad, Gandhinagar, Indore, Jaipur, Udaipur, Rajkot, Vadodara).
• Promoters: Parth Naimeshbhai Shah, Umesh Satishkumar Uttamchandani, Rushit Shardulkumar Shah, Jaimin Jagdishbhai Shah, Pranav Niranjan Pandya, Amisha Jaimin Shah, Kruti Pranav Pandya, and Dev Information Technology Limited.

Financials

Consolidated figures (Rs. Cr)

Post IPO Market cap: ₹550.14 Cr Market cap/sales (FY25): 3.5x P/E FY24: 1220.00 times P/E FY25: 305.00 times

Observations on results: The company showed a turnaround from a net loss in FY23 to modest profits in FY24 and FY25. Revenue has shown significant growth over the last three fiscal years, with a CAGR of 50.75%. Despite high EBITDA margins, net profit margins remain low due to higher interest and depreciation costs.

Anchor Book

• Dev Accelerator raised a total of ₹63.15 crore from 11 anchor investors before the IPO. The top 10 anchor investors by allocation were: Finavenue Capital Trust (15.83%), Sunrise Investment Opportunities Fund (11.32%), VPK Global Ventures Fund (9.50%), Universal Sompo General Insurance (7.92%), Abans Finance (7.92%), Chattisgrah Investments (7.92%), Meru Investment Fund PCC (7.92%), SB Opportunities Fund II (7.92%), Shine Star Build Cap (7.92%), and Vbcube Ventures Fund (7.92%).
• The remaining anchor investor, Venus Investments VCC-Venus Stellar Fund, also received 7.92% of the anchor portion.

Salient points

• Use of funds: Capital expenditure for fit-outs in new centers (₹73.12 Cr), repayment/pre-payment of certain borrowings (₹35.00 Cr), and general corporate purposes.
• Business scenario: Operates in a highly competitive and fragmented flexible workspace sector. India’s flex space market is expected to double over the next five years. The company has a strong focus and presence in Tier 2 cities.
• Business Verticals: Managed office spaces, coworking spaces, design and build services, IT hardware & networking, software & website development, HR consulting & payroll management, recruitment & staffing, accounting & audit management, complete facility management, events & engagements, food & beverages, and concierge services.
• Revenue Model: Primarily operates on a straight lease model (62% in FY25), with some centers on a furnished by landlord model (37% in FY25) and a small portion (1% in FY25) on a revenue share model.
• Growth Strategies: Strategic expansion into existing and new markets, with plans to establish 8 new centers (4 funded by IPO proceeds, 4 under furnished by landlord model), including its first international center in Sydney. Focus on vertical growth in existing Tier 2 cities by taking larger assets. Enhancing asset procurement strategy with OpCo-PropCo model.
• Risks: The company does not own land and buildings at any centers, leading to potential relocation costs and termination of client contracts upon lease termination. Significant client concentration risk (over 50% revenue from top 20 clients) and geographical concentration risk (over 42% centers in Gujarat).
• Revenue split by region (FY25): Within India (₹1,554.99 million), Outside India (₹33.76 million).
• Revenue split by product or service (FY25): Managed Space Services (₹933.75 million), Designing & Execution (₹403.01 million), Co-working Space (₹89.07 million), IT/ITeS Services (₹81.83 million), Facility Management & Other Services (₹58.85 million), Payroll Management Service (₹22.24 million).
• Average occupancy rate in operational centers was 87.61% for FY25, 83.09% for FY24, and 80.85% for FY23. Expansion: Plans to add 8 new centers with an estimated SBA of 940,961 sq ft over the next two years in India and abroad.
• Strategies: Back-to-back model with 60-70% pre-filled demand, ensuring strong occupancy rates. Long-term lease agreements with developers and customers (9-10 years and 3-3.5 years lock-in respectively).
• Order book: Strong occupancy numbers with less than 1% attrition rate for managed office space clients. Clients: Over 250 clients including large corporates, MNCs, and SMEs such as QX Global Services Pvt. Ltd, Paperchase Accountancy India Pvt. Ltd, Zomato Ltd, and Wipfli India LLP. Top 10 clients contributed 38.58% of revenue in FY25, and top 20 clients contributed 54.13%.
• CAGR Revenues (FY23-FY25): 50.75%. CAGR EBITDA (FY23-FY25): 64.1%.

Peers

Figs in Rs. Crore

Management commentary

Umesh Uttamchandani, Managing Director at Dev Accelerator, stated that the company is primarily focused on Tier 2 cities, providing managed office space solutions to mid-to-large size enterprises (150-1000 seats). He explained that the majority of the IPO funds (₹73 crores) will be used for future capital growth and investments in Tier 2 cities, with ₹35 crores for debt repayment to reduce cost of capital. Regarding profitability, he mentioned that the business is cash flow positive, but PAT is impacted by IndAS accounting standards, which inflate depreciation due to projecting rentals for the full lease tenure (9 years) to present value. The right way to gauge the industry is through cash EBITDA. Strategies to increase PAT include debt repayment (reducing annual interest payout from ₹16.5 crores to ₹6-7 crores), larger assets coming online with longer rental periods, and the OpCo-PropCo model generating other income. The company prefers the straight lease model for onboarding quality assets and has strong occupancy numbers (40-60% demand pre-filled for new centers) and customer lock-in periods longer than developer lock-ins. Depreciation for fit-outs is typically spread over five years, with ROI starting when a client stays beyond the 3.5-4 year lock-in period. The company boasts less than 1% attrition rate. The expansion strategy is to shift from horizontal growth (adding new cities) to vertical growth, penetrating deeper into existing 11 cities, particularly Tier 2 cities, by consuming campus-sized assets.

Opinion

I am likely to apply for the IPO even as the issue appears aggressively priced. DevX has good presence in Tier-2 markets in managed workspaces with strong occupancies and enterprise-focused solutions.

This post is exploratory and educational purposes only.

• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.