Executive Centre India files DRHP for IPO

Mumbai, 24 July 2025: Executive Centre India Ltd has officially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), proposing to raise ₹2,600 crore through a fresh equity issue. The IPO has no offer for sale (OFS). The company intends to raise capital for growth and global acquisitions.

Consolidated Revenue Soars While Losses Deepen: TEC India’s Balancing Act

Executive Centre India has reported a steady rise in revenue from operations, growing from ₹763.39 crore in FY23 to ₹1,322.64 crore in FY25 — reflecting a robust compound annual growth rate (CAGR) of 31.63%. However, despite this growth trajectory, the company continues to post net losses, with FY25 seeing a loss of ₹80.61 crore compared to ₹56.32 crore in FY24 and ₹7.36 crore in FY23. The increasing losses are primarily attributed to expansion-related lease and finance costs, underscoring the financial strain of scaling rapidly in multiple markets.

Adjusted EBITDA Margins Slide as Expansion Costs Bite

Adjusted EBITDA margins declined slightly from 24.10% in FY24 to 22.31% in FY25, indicating pressure on profitability. The margin was higher at 22.76% in FY23 but has since narrowed as international operations and infrastructure investments expanded. This pattern reflects a classic growth-versus-margin trade-off, as TEC India continues to invest heavily in its international footprint, especially in the Middle East and Southeast Asia.

Equity Position Strengthens, But Still Deep in Negative Territory

While the company’s total equity improved from ₹(3,493.70) crore in FY23 to ₹(2,728.44) crore in FY25, it still remains significantly negative. This indicates that the company is yet to fully recover from its initial investment and operating expenses. The upcoming ₹2,600 crore infusion through the IPO is likely intended to partly correct this imbalance and shore up equity capital for future sustainability.

IPO Proceeds to Fuel Global Restructuring and Expansion

Key IPO Highlights

• Issue Size: ₹2,600 crore (fresh issue only)
• Offer for Sale (OFS): Nil
• Face Value: ₹2 per share
• Pre-IPO Placement (Optional): Up to ₹520 crore (20% of issue)
• Listing Plans: NSE and BSE
• DRHP Filing Date: July 23, 2025

Proposed Use of Proceeds

The net proceeds from the IPO will be primarily allocated as follows:

• Investment in TEC Abu Dhabi to acquire TEC SGP & Dubai: ₹2,410 crore
• General Corporate Purposes: To be finalised

In case a pre-IPO placement of ₹520 crore is completed, the overall issue size will be reduced accordingly.

Revenue from Asia Powers TEC India’s Growth Vision

With 54% of its revenue generated from international operations — including Singapore, the UAE, Indonesia, Vietnam, and the Philippines — TEC India is increasingly positioning itself as a regional leader in flexible workspace solutions. As of March 31, 2025, the company operated 89 centres across 14 cities in 7 countries. Its diversified revenue streams offer a cushion against regional slowdowns while also enhancing its brand credibility among multinationals.

Anchor Investor Strategy Signals Strong Institutional Confidence

The company aims to allocate at least 75% of its IPO to Qualified Institutional Buyers (QIBs), with 60% of that earmarked for anchor investors. Non-Institutional Investors (NIIs) will be allotted no more than 15%, and retail individual investors (RIIs) up to 10%. This structure prioritises strong institutional participation, signalling long-term confidence in the company’s prospects.

Solid Regulatory Standing and Trusted Leadership

The DRHP clearly states that there are no pending regulatory actions against the company by SEBI or stock exchanges. Furthermore, the company accepts full legal responsibility for the accuracy of all disclosures under Section 32 of the Companies Act, 2013. The IPO is being managed by prominent Book Running Lead Managers including Kotak Mahindra Capital, ICICI Securities, and Nomura Financial Advisory. KFin Technologies has been appointed as the registrar to the issue.

Financial Health Snapshot Reflects Ambitious Yet Risk-Aware Strategy

In FY25, TEC India posted a total income of ₹13,463.97 million, up from ₹10,553.19 million in FY24 and ₹7,721.12 million in FY23. Revenue from operations mirrored this trajectory, rising to ₹13,226.43 million. Despite a widening net loss margin of (6.09)%, the company’s EBITDA rose to ₹7,133.29 million in FY25, from ₹5,835.48 million in FY24 and ₹4,680.30 million in FY23. The EBITDA margin stood at 53.93% for FY25, slightly down from 56.29% in FY24 and 61.31% in FY23 — again reflective of rising operating costs.

The company’s return on adjusted capital employed was 18.50% in FY25, significantly lower than the 43.68% seen in FY24 and 57.63% in FY23, suggesting more capital is now tied up in long-term investments that are yet to yield optimal returns. Still, with total assets growing to ₹38,888.34 million in FY25, TEC India appears to be betting on long-term scale over short-term profitability.

About Executive Centre India Ltd

A premium provider of flexible and serviced office solutions, Executive Centre India Ltd is part of the broader TEC Group, headquartered in Asia with over three decades of experience. The company provides coworking spaces and business support services for multinational clients and corporates across India, Singapore, UAE, and Southeast Asia. Its upcoming IPO is positioned to not just raise capital but also establish TEC India as a dominant player in the premium workspace market across Asia.

REF: https://nsearchives.nseindia.com/corporate/Registration_23072025223218_TEC_DRHP.pdf

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