WeWork India Moves NCLT To Clean Up Balance Sheet, Seeks To Set Off ₹2,050 Crore Accumulated Losses

WeWork India Management Ltd has approached the National Company Law Tribunal's Bengaluru Bench, seeking approval for a proposed reduction of its share capital by utilising funds from its Securities Premium Account. The company filed the application in Form RSC-1 on September 11, invoking Section 66 read with Section 52 of the Companies Act, 2013, along with the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016.

The filing follows internal approvals already secured by the company. Its Board of Directors cleared the proposal on July 16, 2026, and shareholders gave their assent at a meeting held on August 25, 2026. With both corporate approvals in place, the matter now moves to the Tribunal for judicial sanction, a mandatory step under company law before any reduction of share capital can take effect.

At the heart of the proposal is a plan to use ₹2,050.16 crore out of the ₹2,158.99 crore lying in WeWork India's Securities Premium Account. This amount is intended to fully offset the company's accumulated losses of ₹2,050.16 crore as recorded on March 31, 2026. In its application, the company said the exercise "would eliminate the accumulated losses from its books of account and help present a true and fair view of its financial position."

Reduction of share capital through the securities premium route is a recognised corporate restructuring mechanism, allowing companies to clean up their balance sheets without fresh fundraising or write-offs elsewhere. Once accumulated losses are set off, a company's financial statements reflect a stronger net worth, which can improve investor confidence and creditworthiness. However, because such reductions affect shareholder capital, the law requires NCLT approval, along with notice to creditors and regulators, to ensure no stakeholder's interests are unfairly prejudiced.

The NCLT application comes at a time when WeWork India's underlying business appears to be gaining ground. The flexible workspace provider reported a sharp narrowing of its net loss for the first quarter of FY27, down to ₹4.3 crore from ₹14.1 crore in the same period last year. The company attributed this improvement to rising demand for flexible office space, which pushed up both revenue and operating profit during the quarter.

Revenue for the quarter climbed 27.7 per cent year-on-year to ₹705 crore, compared to ₹535.3 crore a year earlier. EBITDA rose 30.4 per cent to ₹438 crore from ₹336 crore, while the company's EBITDA margin improved to 64.04 per cent from 62.7 per cent in the corresponding quarter of the previous year.

The company's operational footprint also expanded during the period. WeWork India now runs 79 centres across eight cities, offering 9.1 million square feet of operational space. Including signed leases and letters of intent, its total committed footprint stands at 12 million square feet. The company added close to 7,000 desks during the quarter, taking its total operational capacity to 133,600 desks, a 17.1 per cent increase year-on-year.

Markets, however, showed a more muted response. Shares of WeWork India Management closed 0.90 per cent lower at ₹670.85 on the NSE on Friday, even as the company's operational numbers improved.

Inputs from CNBC