Dev Accelerator IPO: A Detailed Analysis and Key Pointers
Dev Accelerator's IPO aims to raise capital for future growth.
This post provides a detailed analysis of the Dev Accelerator Initial Public Offering (IPO), covering key aspects from the company's business model to its financial performance and IPO . The information is based on RHP and publicly available data.
Five Executive Takeaways
- 1. Flexible Workspaces: Dev Accelerator is a provider of flexible workspace solutions under the brand name DevX, with a focus on managed offices and co-working spaces spread across 28 centers in 11 cities within India.
- 2. Financial Growth: The company has demonstrated revenue growth over the past three years, with revenue increasing from ₹69.91 crore in FY23 to ₹158.87 crore in FY25.
- 3. Fresh Issue Only: The IPO is a fresh issue of 23.5 million equity shares, with no offer for sale (OFS) from promoters or existing investors.
- 4. Use of Proceeds: The company plans to use the funds raised for capital expenditure on new centers, repayment of certain borrowings, and general corporate purposes.
- 5. Valuations: At the upper end of the price band, the company's post-issue market capitalization is approximately ₹550 crore.
IPO Dates: IPO will open on Sept 10 and closes on Sept 12. Expecting listing date is Sept 17.
About the Company
- Dev Accelerator Limited was incorporated on August 28, 2020, as a public limited company, with its registered office in Ahmedabad, Gujarat.
- The company provides end-to-end flexible workspace solutions, including managed office spaces, co-working spaces, and design-build services. These services cover everything from design and development to technology integration and asset management.
- The company’s revenue is primarily generated from managed space and co-working space services. It has 14,144 seats capacity with a total area under management of SBA 860,522 square feet that spread across 28 centers in 11 cities in India as of May 31, 2025.
- Company caters to over 250 clients.
About Promoters
- The promoters are Parth N. Shah, Umesh S. Uttamchandani, Rushit S. Shah, Jaimin J. Shah, Pranav N. Pandya, Amisha J. Shah, Kruti P. Pandya, and Dev Information Technology Limited.
- The promoter group holds a pre-offer shareholding of 54.11
About Business Model
- Imagine a school that provides furnished classrooms and common areas for rent. Instead of students, they rent to companies and professionals. Dev Accelerator provides these "classrooms" (managed offices and co-working spaces) for businesses to use without the hassle of setting up everything themselves.
- The company source and procure workspaces through the Straight Lease Model, Revenue Share Model, Furnished by Landlord model and the OpCo–PropCo Model.
- The company generates revenue by charging clients for space solutions and related services. Revenue is earned primarily from its managed space and co-working space service offerings. As of FY25, revenue was ₹158.87 crore.
Unique Selling Proposition (USP)
- Customers choose Dev Accelerator for its fully customizable office spaces, which allow them to establish a presence without significant upfront capital.
- Key USPs include a strong foothold in Tier-2 cities, a focus on long-term contracts that provide stable revenue, and an integrated platform offering end-to-end solutions like design and facility management.
About Financials
- Sales, Operating Profit, and PAT:
- Sales have increased from ₹69.91 crore in FY23 to ₹108.09 crore in FY24, and further to ₹158.87 crore in FY25.
- Operating Profit (EBITDA) also shows an increasing trend, rising from ₹6.56 crore in FY24 to ₹9.36 crore in FY25.
- Profit After Tax (PAT) has increased significantly from a loss of ₹4.84 crore in FY23 to a profit of ₹0.43 crore in FY24, and then to ₹1.8 crore in FY25.
- Margins: Both operating profit (EBITDA) margins and net profit margins have been increasing in the past two years.
- Free Cash Flow: FY25: FCF = Cash from Operations (₹93.75 crore) - Capital Expenditure (₹38.01 crore) = ₹55.74 crore. FY24: FCF = Cash from Operations (₹7.56 crore) - Capital Expenditure (₹40.86 crore) = -₹33.30 crore.
- EBITDA to Cash Flow from Operations Conversion: FY25: (₹93.75 crore / ₹9.36 crore) * 100 = 1001.6%.
- Balance Sheet Health: While the company has shown strong growth in revenue and profits, it relies on leased properties, which exposes it to rental cost escalations, and its profitability remains thin with a low PAT margin of 1.1% in FY25.
Key Pointers to Note
- Red Flags: The company has a heavy reliance on a limited number of centers, particularly in Gujarat, which contributed over 30% of its FY25 revenue.
- Litigation: There are no criminal proceedings or major litigations against the company or its promoters as mentioned in the RHP.
- Related Party Transactions: The RHP discloses details of transactions with related parties, including promoters and promoter group entities, for services and property leases.
Expansion Plans
- The company is not involved in manufacturing.
- Dev Accelerator plans to use the IPO proceeds for capital expenditure, including fit-outs for new centers. This includes a new center in Surat and its first international center in Sydney, Australia.
About Competitors / Peers
- Recently listed Awfis Space Solutions as a key listed peer in the Indian market.
About IPO and its Valuations
- IPO Price Band: The price band is set at ₹56 to ₹61 per share.
- Lot Size: The minimum lot size is 235 shares
- Dates: The IPO opened on September 10, 2025, and will close on September 12, 2025. The shares are scheduled for listing on September 17, 2025.
- Issue Size: The IPO Issue size is ₹143.35 crore
- Issue Size Breakup: The entire issue is a fresh issue of 23.5 million shares, with no offer for sale.
- Valuation: At the upper end of the price band, the company's post-issue market capitalization is approximately ₹550 crore. The P/E ratio is 233.25 based on FY25 earnings.
Source: SEBI, BSE, NSE, DRHP, Dev Accelerator, Industry Data
Disclaimer: This information is for knowledge purposes only and is based on the provided documents and publicly available data. It does not constitute investment advice or a recommendation to buy or sell securities. Investors are advised to read the Red Herring Prospectus carefully and consult with a financial advisor before making any investment decisions.
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