Kontor Space Limited IPO
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i. Kontor Space provide “space-as-a-service” by renting and managing commercial spaces. Their Company purchases the property and / or take properties on rent, to sub-rent/sub-lease the same to single or multiple clients for their workspace requirements with or without furnishing the same as per their needs on per-seat basis.
ii. They further, invest in fit outs to customize the property to suit their business model and renovate, modernize the properties according to the working needs in terms of business requirements such as furniture, work-desks, open work area, cabins, meeting rooms, conference rooms, cafeteria, play area, reception, lockers, de-stress zones etc., and equip the same with peripherals like printers, scanners, attendance devices, telephones, hi-speed internet, airconditioners, water-coolers, smoking-zones, and other facilities.
Business Strengths
i. Brand Image Backed by Services
ii. Asset-light model
iii. Economical pricing
Objects of the Kontor Space Limited IPO:
The company intends to utilize the net proceeds from the issue towards the funding of the following objects:
i. To make the payment of Rental Deposits of new co-working centers.
ii. To carry out the Capital Expenditure for fit-outs of new co-working centers.
iii. General Corporate Purpose.
Kontor Space Limited IPO Details:
| Open Date: | Sep 27 2023 |
| Close Date: | Oct 03 2023 |
| Total Shares: | 1,680,000 |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Type: | Fixed Price Issue IPO |
| Issue Size: | 15.62 Cr. |
| Lot Size: | 1200 Shares |
| Issue Price: | ₹ 93 Per Equity Share |
| Listing At: | NSE Emerge |
| Listing Date: | Oct 05 2023 |
Promoters And Management:
i. Mr. Kanak Mangal oversees and contributes toward overall business management of the Company. His contributions have led the Company to smoothly transition from a nascent stage to a process driven company equipped to handle rapid expansion. He holds degree of Bachelor of Business Administration and PostGraduation in Management Studies from MIT School of Telecom and Management Studies. He started his career as a Banker with HDFC Securities and SVC Bank. He further moved on to taking roles in sales and networking for a B2B trading company in Dubai. He has 12+ year business operation experience including 5+ years of experience in commercial real estate and co-working spaces industry. His strength lies in the formulation of marketing strategy and innovative solutions in the domain of Business expansion and operations.
ii. Ms. Kanan Kapur is responsible for the handling overall functioning and Business development of the Company and plays a vital role in the planning, finance and implementation functions of the Company. Ms. Kanan Kapur has extensive experience of 20 years in business development, growth strategy and fund management. She has worked extensively in both national and international market such as Africa, UAE and USA. She has worked on debt syndication in sector such as real estate and infrastructure. She further pivoted to business development and B2B roles later in her career. She further also pivoted to more business development and B2B Service roles later in her career. Ms. Kanan Kapur is a Commerce Graduate and Qualified ACCA (Chartered Accountant) Level II professional.
iii. Mrs. Neha Mittal is engaged in brand building, strategic management related to community building, customer experience and customer retention. As a Promoter and Non-executive Director, her contribution has been substantial to navigate the Company as a service focused co working player, and has seen maximum uptakes of their inventory by existing clientele, reducing customer acquisition costs and increasing retention rates. She holds a degree of Masters in Business Administration. Further she is also licensed as an Independent Real Estate Consultant. She possesses 8 years of overall experience in Real Estate Consultancy, Business Administration
Financials of Kontor Space Limited IPO:
Particulars ( In Lakhs ) |
2021 |
2022 |
2023 |
| Revenue from Operations | 390 | 401 | 917 |
| Other Income | 0 | 3 | 0.4 |
| Total Revenue | 390 | 404 | 918 |
| Employee benefits expenses | 61 | 41 | 39 |
| Other Expenses | 283 | 345 | 482 |
| EBITDA | 46 | 18 | 397 |
| Depreciation & Amortisation | 72 | -41 | 80 |
| Finance Cost | 11 | 13 | 54 |
| EBIT | -26 | 58 | 317 |
| OPM (%) | 11.76% | 4.37% | 43.27% |
| Exceptional items | 14 | 0.6 | 1.8 |
| PBT | -51 | 45 | 262 |
| Tax | 10 | 14 | 74 |
| PAT | -62 | 30 | 188 |
| NPM (%) | -15.82% | 7.54% | 20.47% |
| No.of Shares | 61.80 | 61.80 | 61.80 |
| EPS | -0.99 | 0.49 | 3.04 |
Comparison With Peers:
Note: -
There are no listed peers in India, they believe that below are there competitors having large market shares in India and considerably bigger than the Company are mentioned below :-
| Indian Peers | International peers |
| Awfis | WeWork |
| 91Springboard | The Executive Centre |
| Simpliworks | Regus |
| Smartworks | VentureX |
| CoWrks |
Recommendation on Kontor Space Limited IPO:
Review And Recommendation of Kontar Space SME IPO by IZ team is 4/10
A) Company Overview
1. Originally incorporated as "Kontor Space Private Limited" on January 17, 2018. Converted to a Public Limited Company on June 27, 2023, and renamed "Kontor Space Limited." 2. Business Focus: Provides "space-as-a-service" by renting and managing commercial spaces, fostering collaboration and productivity for clients from startups to large conglomerates. 3. Promoters: Mr. Kanak Mangal and Mrs. Neha Mittal are the present promoters. 4. Trademark Ownership: Trademark owners of 'Kontor' for providing co-working spaces.B) Business Model
1. Property Management: Acquires or leases properties, customizes them with fit-outs, and offers furnished workspaces to clients on a per-seat basis. 2. Asset-Light Model: Operates on an asset-light model for better profitability, currently leasing three properties and owning one, with plans to lease two more.C) Business Strengths
1. Brand Image: Well-established brand, known for delivering high-quality co-working services, contributing to a strong reputation. 2. Economical Pricing: Emphasis on cost-effectiveness with competitive pricing at different locations. 3. Contract Flexibility: Adaptable contracts catering to the dynamic needs of startups and large enterprises. 4. Smart Workspaces: Thoughtfully designed eco-friendly spaces with advanced technological measures to boost productivity. 5. Strategic Locations: Co-working spaces in key startup hubs/business areas in Maharashtra, well-connected for domestic and international clientele. 6. Experienced Management: A qualified and experienced management team contributing to the company's growth. 7. Financial Performance: Demonstrated robust financial performance with positive EBITDA and net profit.D) Competition:
1. Market Competition: Operating in a highly competitive and fragmented co-working industry with competition from both domestic and international players. 2. Competitive Strategy: Focuses on superior quality, competitive pricing, and timely service availability to counter competition and capture market share.E) Expansion Plans
1. Current Locations: Operating in Thane, Pune, Fort, and BKC (Mumbai). 2. Future Expansion: Plans to lease two more properties for expansion.F) Client Base
Diverse Client Mix: Client base includes corporates and enterprises, ensuring stable and predictable revenue. Technology Integration: Enquiry/Booking Convenience: Utilizes technology for easy booking, virtual tours, inquiry systems, and 24/7 client support.G) Financials Performance:
1. The Revenue is Rs.3.9 Crore in FY21 and Rs.9 Crore in FY23. 2. The EBITDA is 46 Lakhs in FY21 and 3.9 Crore in FY23. 3. The PAT is (-62) Lakhs in FY21 and 1.8 Crore in FY23. 4. As per FY23, CFO/EBITDA is 1.00 and Debtors Days is 2. 5. As per FY23, EPS is 3.04, Market Capitalization is 57 Crore & P/E is 30.59x.Lead Manager of Kontor Space Limited IPO:
Registrar of Kontor Space Limited IPO:
Company Address:
Kontor Space Limited
Office No. A1 & B1, 9th Floor,
Ashar IT Park Road No. 16 Z,
Wagle Industrial Estate, Thane West - 400604
Phone: +91 022- 62790001
Email: info@kontorspace.in
Website: https://kontorspace.in/index.php
Discussion on Kontor Space Limited IPO:
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Avoid
Problems in Space Sharing Companies
1. Regulatory Hurdles
Space sharing companies operate in an environment that is highly regulated by both local and national governments. From zoning laws to building codes, these companies often face a labyrinth of legal requirements. Failure to comply can result in hefty fines and even shutdowns, making it a risky venture for investors.
2. Market Saturation
With the rising popularity of the shared economy, many space sharing platforms have entered the market, leading to saturation. This makes customer acquisition challenging and expensive, thereby driving up the Cost Per Acquisition (CPA).
3. Operational Costs
The operational costs for these companies can be high, including maintenance, security, and cleaning. While technology minimizes some costs, maintaining a high standard for shared spaces can quickly become expensive.
4. Quality Control
Maintaining consistent quality across various spaces is another challenge. As these platforms usually rely on individual property owners, ensuring that each space meets the company’s standards can be difficult.
5. Liability and Insurance
The nature of space sharing brings forth a host of liability issues. Incidents like theft, property damage, or personal injury can result in costly legal battles. This necessitates a robust insurance system, which can be expensive to maintain.
6. Revenue Models
Finding a profitable revenue model is often a challenge. While some companies opt for a commission-based model, others prefer membership fees. Striking the right balance to ensure profitability without alienating customers is tricky.