Co-Working’s Only Listed Company EFC (India) To Triple Its Seat Capacity

BY Realty Plus

Riding on the back of strong institutional demand, EFC (India), the only listed company in integrated serviced offices and co-working spaces, plans to increase its seat capacity from the present 32,000 to 92,000 seats by March 2026. EFC (I)'s seat capacity increased from 18000 in FY2023 to 32000 as of September 2023. The company plans to triple its seat capacity by adding around 60,000 seats over the next three years.

Announcing the plan, Umesh Sahay, Founder & CEO, EFC (I) Limited, said, “The concept of shared workspaces has gained significant momentum in the last six years, and, currently, India is the second-largest co-working market in the world. It is estimated that around 30-35 million sq. ft. of flexible office stock is available across the country. Approximately 71%, or 25 million sq. ft., is from large operators. In order to capitalize on this opportunity, we are looking at a massive expansion in the next three years to emerge as one of the biggest players in the industry. This expansion will be funded through a mix of capital, both equity and debt."

The EFC (India)’s enterprise workspace solutions are under the brand EFC, while co-working spaces are branded under Sprint. As of September 30, 2023, the company operates around 32,000 seats across seven cities, namely Maharashtra, Hyderabad, Tamil Nadu, Karnataka, Gujarat, Uttar Pradesh, and West Bengal, spanning over 35 centres totalling over 1.5 million sq. ft. of area. The company charges Rs 6,000 to Rs 10,000 per desk from its customers.

"The key factors driving the planning and construction of each co-working facility include affordability, ease of collaboration, strategic location, and single-point billing to cover all expenses. EFC (I) offers enterprise-office services to large corporates requiring 100+ seats at a single location. Most of the Enterprise Services contracts are usually with a tenure of five years to be renewed after expiry,” said Umesh.

According to industry estimates, India's flexible space industry is expected to cross 50 million square feet in 2023. The total flexible workspace stock is almost 30 million square feet in the top six Indian cities, equivalent to 4.3% of the total Grade A and B commercial office stock. Bengaluru and Delhi-NCR collectively account for more than 50 percent of the flex space stock in India, with Bengaluru alone housing around 10.6 million square feet.

Interestingly, the flexi-space industry occupies about 12 to 16 million coworking seats in India, and it is estimated that about 10 to 11 million seats are occupied by “enterprise customers” or "corporates," while the remaining seats are taken by freelancers and SME's. Analysts expect that by 2024, around 5 million people will work from co-working spaces, and the market is expected to continue to grow at 21% on a CAGR basis.

Unlike other industry players, EFC offers comprehensive, end-to-end solutions to businesses in the area of office space management, which includes helping customers identify the right property, supporting negotiations with property owners, furnishing and designing the property as per client specifications, and carrying out ongoing management and maintenance functions on behalf of the client. WhiteHills Interior, a 51% subsidiary, provides interior design solutions backed by strong supply chain enablers in commercial and residential real estate segments.

“EFC’s strategy has been to achieve profitable growth by focusing on cost optimization and margin protection. We are currently present in all the growth hubs of India and are ideally poised to profitably leverage the exponential growth imminent in the co-working space in India,” added Umesh.

Earlier this month, the company reported a total revenue of Rs 155.98 crores for the half year ended September 30, 2023, with an EBITDA of Rs 71.03 crores and a net profit of Rs 14.25 crores. The company is expecting to add 1.5 million to 2 million sq. ft. of spaces every year and close FY 24 and FY26 with total revenue of about Rs. 400 crores and Rs. 1,000 crores, respectively.

The company is already in action to achieve the target. In a regulatory filing last week, the company announced a meeting with its Board of Directors on December 1, 2023, to consider and approve a proposal for raising funds through equity shares, private placement/preferential Placement / Preferential Issue or other methods.

Tags : enterprise customers Umesh Sahay EFC cost optimization margin protection Delhi-NCR