Wakefit Innovations IPO review (Not Rated)

•    The company is an emerging leader in Mattress, Furniture and Furnishings with PAN India presence. 
•    The company marked growth in its top lines for the reported periods, but has turned the corner only from H1-FY26.
•    The management is confident of maintaining the growth trends with surge in profits going ahead.
•    Based on its recent financial data, the issue appears aggressively priced. 
•    Well-informed/cash surplus investors may park funds for medium to long term.

ABOUT COMPANY:
Wakefit Innovations Ltd. (WIL) is the largest D2C home and furnishings company in India in terms of revenue in Fiscal 2024. (Source: Redseer Report) As of March 31, 2024, with just over nine years of operations, it is the fastest homegrown player in the home and furnishings market in India among organized peers to achieve a total income of more than Rs, 1000 cr. Its revenue from operations has grown at a CAGR of 24.87% from Fiscal 2022 to Fiscal 2024, which is approximately 1.64 times higher than the growth of the average revenue from operations of the organized peers (Source: Redseer Report). The company offers a wide range of products, including mattresses, furniture, and furnishings, through its omnichannel presence, ensuring a seamless customer experience across all touchpoints, both online and offline. 

The company is a full-stack vertically integrated company, enabling it to control every aspect of operations, from conceptualizing, designing and engineering its products to manufacturing, distributing and providing customer experience and engagement. Over the years, it has evolved from a sleep solutions player into a one-stop destination offering home and furnishing solutions to meet customers’ evolving needs, with products tailored to cater to the mass, masstige, and premium segments. WIL is the only D2C home and furnishings company in India that has scaled across all three product categories, namely, mattresses, furniture, and furnishing and décor.

WIL is amongst the top three companies in the organized mattress market in terms of revenue in Fiscal 2024. (Source: Redseer Report). As per Forbes India Awards for D2C Disruptors in 2022, it ranked first among D2C players with operations of over five years in the Home and Lifestyle category. (Source: Redseer Report). The company is also the top-rated player across the top two horizontal online marketplaces in India in the home and furnishings market across SKUs in the mattress, furniture and furnishings and décor categories among organized peers which have garnered a significant number of user ratings as of November 11, 2025. (Source: Redseer Report).

Its average rating across both platforms was approximately 4.4 out of 5 in mattresses, approximately 4.2 out of 5 in furniture, and approximately 4.2 out of 5 in furnishings and décor as of November 11, 2025. (Source: Redseer Report). Contribution from Mattresses in its top line stood on an average 61+% for the reported periods, followed by Furniture (27+%) and Furnishings (the rest). The company sells its products through a comprehensive omnichannel strategy that integrates both - own channels and external channels, enabling it to reach customers in more than 700 districts across 28 states and 6 union territories. Its own channels comprise website and COCO – Regular Stores, while external channels comprise various marketplaces, such as major e-commerce platforms, including Pepperfry Limited and quick commerce platforms, and multi-branded outlets (“MBOs”) including Pai International Electronics Limited. Its COCO – Regular Stores have grown from 23 as of March 31, 2023 to 125 as of September 30, 2025, located in 62 cities across 19 states and 2 union territories. Further, the company commenced its MBO operations on April 5, 2022, and within a period of less than three and a half years, its MBO store count has grown to 1,504 stores, located in 395 cities across 24 states and 4 union territories, as on September 30, 2025. As of the said date, it had 2212 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO worth Rs. 1288.89 cr. (approx. 66096867 equity shares of Re. 1 each at the upper cap). The issue comprises of fresh equity issue worth Rs. 377.18 cr. (approx. 19342462 shares at the upper cap) and an Offer for Sale (OFS) of 46754405 equity shares (worth Rs. 911.71 cr. at the upper cap). The company has announced a price band of Rs. 185 – Rs. 195 per equity shares of Re. 1 each. The issue opens for subscription on December 08, 2025, and will close on December 10, 2025. The minimum application to be made is for 76 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes XX% of the post-IPO paid-up equity capital. From the net proceeds of the fresh equity issue, the company will utilize Rs. 30.84 cr. for capex on new 117 COCO stores, Rs. 161.47 cr. for paying lease, sub-lease rent, license fees etc. for its existing COCO stores, Rs. 15.41 cr. for capex on purchase of new equipments, Rs. 108.40 cr. for Marketing and advertisement expenses for enhancing awareness and brand visibility, and the rest for general corporate purposes.

The three Book Running Lead Managers (BRLMs) to this issue are Axis Capital Ltd., IIFL Capital Services Ltd., and Nomura Financial Advisory and Securities India Pvt. Ltd., while MUKFG Intime India Pvt. Ltd., is the registrar to the issue. 

Having issued initial equity shares at par, the company has issued/converted further equity shares in the price range of Rs. 195 – Rs.  10600.59 per share (based on FV of Re. 1), between December 2020, and November 2025. It has also issued bonus shares in the ratio of 100 for 1 in February 2021, and 11 for 1 in May 2025. The average cost of acquisition of shares by the promoters/selling stakeholders Rs. 0.02, Rs. 0.04, Rs. 17.18, Rs. 20.52, Rs. 80.93, Rs. 82.67, and Rs. 85.93 per share.

Post-IPO, its current paid-up equity capital of Rs. 30.75 cr. will stand enhanced to Rs. 32.68 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 6373.16 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit/ - (loss), of Rs. 820.01 cr. / Rs. – (145.68) cr. (FY23), Rs. 1017.33 cr. / Rs. – (15.05) cr. (FY24), and Rs. 1305.43 cr. / Rs. – (35.00) cr. (FY25). For H1 of FY26 ended on September 30, 2025, it posted a net profit of Rs. 35.57 cr. on a total income of Rs. 741.30 cr. The company marked steady growth in its top line, but marked loss from FY23 to FY25 and turned the corner from H1-FY26. According to the management, surge in loss for FY25 is due to one time adjustments in accounts and exceptional item. If we consider the same, then for FY25, it has posted a net profit of Rs. 50+ cr.

For the last three fiscals, the company has posted an average negative EPS of Rs. – (1.68) and an average negative RoNW of – (9.09) %. The issue is priced at a P/BV of 10.89 based on its NAV of Rs. 17.90 as of September 30, 2025, but its post-IPO NAV data is missing from the offer documents.

If we attribute FY26 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at negative P/E of 89.45.  Based on FY25 earnings also, the P/E stands negative. Thus, the issue appears aggressively priced. 

For the reported periods, the company has posted PAT margins of – (17.93) % (FY23), - (1.53) % (FY24), - (2.75) % (FY25), and 4.91% (H1- FY26), and RoCE margins of – (20.50) %, 0.27%, - (0.68) %, and 6.04% respectively for referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for the referred periods of the offer document. It has already adopted a dividend policy in June 2025, based on its financial performance and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Sheela Foam as its listed peer. It is currently trading at a P/E of 108.0 (as of December 04, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORD:
The three BRLMs associated with the offer have handled 98 pubic issues in the past three fiscals, out of which 20 issues closed below the offer price on the listing date.