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WeWork India IPO Faces Delay Due to Past Issues at Embassy REIT

Written by: Aayushi ChaubeyUpdated on: Jun 3, 2025, 12:29 PM IST
WeWork India's IPO is delayed by SEBI concerns linked to Embassy REIT's past disclosures & ex-CEO's Coffee Day audit case. Resolution pending.
WeWork India IPO Faces Delay Due to Past Issues at Embassy REIT
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WeWork India's planned debut on the stock market seems to be on hold because of an old case involving a former CEO of Embassy Office Parks REIT, a company linked to WeWork India.  

As per NDTV news reports, the market regulator, SEBI (Securities and Exchange Board of India), is reviewing WeWork India's IPO application and has reportedly found concerns regarding late public announcements from Embassy Office Parks REIT.  

These concerns are tied to a case involving its former CEO, Aravind Maiya, which has led SEBI to question the main company (promoter)'s standards for following rules. 

What's Causing the Delay in WeWork India IPO? 

As per NDTV Profit, Embassy Office Parks REIT is now working with SEBI to fix these issues. It's expected that WeWork India's IPO might get the green light once these internal problems are sorted out.  

There's also a possibility that SEBI might officially close the case against Maiya before the IPO, though this isn't confirmed. Some reports suggest the WeWork IPO could be approved by the end of June 2025 if all goes well, but SEBI hasn't given any specific timeline. 

The Coffee Day Connection 

The core of the issue dates back to November 2024. SEBI had ordered Embassy Office Parks Management Services, which manages the REIT, to immediately remove Aravind Maiya as CEO.  

This decision followed findings from the National Financial Reporting Authority (NFRA). The NFRA found that Maiya was negligent during his previous job as an auditor for Coffee Day Enterprises Ltd., the company behind Cafe Coffee Day. 

SEBI's order was a temporary step, requiring a new CEO who met the regulator’s "fit and proper" rules for leadership roles in regulated companies. This whole situation is part of SEBI's wider investigation into rule breaking at Coffee Day Enterprises. Funds, totaling over ₹3,000 crore, were allegedly moved from Coffee Day to a linked company, Mysore Amalgamated Coffee Estates Ltd., without proper approval. This fund diversion was kept secret from Coffee Day's investors, causing big losses in share value when the fraud became known. 

During that period, Maiya was a partner at the audit firm responsible for checking Coffee Day’s finances. The NFRA stated that the audit process failed to properly find or report these major money problems. SEBI concluded that Maiya’s lack of proper oversight, along with NFRA’s finding of "gross negligence," made him unfit to continue as CEO under SEBI’s guidelines. 

Impact on WeWork India 

Currently, a company backed by Embassy holds a significant 73.8% stake in WeWork India. WeWork India's IPO application papers, submitted in late January 2025, actually mentioned SEBI's interim order against Maiya from November 2024 as a potential internal risk. It also stated that Embassy had applied to SEBI for a settlement regarding this issue, but the matter was still pending. 

More recently, on May 31, Embassy REIT disclosed that it had received a notice from SEBI. This notice claimed that the REIT's manager was late in sharing information with the exchange. Specifically, it delayed announcing the NFRA order by 53 days, its own view on Maiya's "fit and proper" status by 35 days, and a SEBI letter by 11 days. The notice also pointed fingers at the REIT's trustee for not properly overseeing the manager's compliance. Embassy Office Parks Management has stated they will respond to SEBI appropriately. 

WeWork India IPO Details 

WeWork India's IPO will be a "pure offer-for-sale," meaning existing owners (Embassy Buildcon LLP and WeWork Global affiliate) will sell up to 4.4 crore shares. WeWork India as a company will not receive any new funds from this IPO. Several large financial companies are involved as lead bankers for this offer. 

Read more:  Upcoming IPOs in June 2025: No Mainboard IPO Scheduled for Listing 

Conclusion 

The delay in WeWork India's highly anticipated IPO highlights SEBI's strict stance on corporate compliance and timely disclosures, especially from linked entities. While the past issues involving Embassy Office Parks REIT and its former CEO are being addressed, their resolution is key to WeWork India's market debut. Investors will be keenly watching for further updates from SEBI and Embassy Group as they work towards clearing these hurdles. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. 

 

Published on: Jun 3, 2025, 12:29 PM IST

Aayushi Chaubey

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