Wakefit
IPO Size: Rs. 1,289 cr
- Fresh Issue of Rs. 377 cr for (i) Rs. 161 cr for rent of existing 125 stores (ii) Rs. 108 cr for marketing (iii) Rs. 31 cr for 117 new stores till FY28E (iv) Rs. 15 cr capex
- Offer for Sale (OFS) of Rs. 912 cr, 75% by 5 investors (40% combined stake to drop to 27%) and 24% by 2 promoters (44% stake to shrink to 37% post IPO)
Price band: Rs. 185-195 per share
- Rs. 56 cr pre-IPO placement, made at Rs. 195 per share, on 14th Nov 2025
M cap: Rs. 6,373 cr, implying 20% dilution
- Only 10% retail, as company reported losses from FY22 to FY25
IPO Date: Mon 8th Dec to Wed 10th Dec 2025, Listing Mon 15th Dec 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
India’s Largest D2C Home and Furnishings Company
Wakefit Innovations is a 9 year old integrated manufacturer cum retailer of home furnishings, like mattress, furniture and furnishings, with Rs. 1,300 cr revenue split 60:30:10 among these product segments. Having 5 plants in Haryana, Karnataka and Tamil Nadu, company markets products through own stores, website and online marketplaces, revenue contribution being 30:30:40 from these channels.
Channel Mix tilting towards
Own website sales have stagnated at Rs. 350-400 cr annually, which is being compensated by COCO stores. Company started COCO stores 3 years ago and presently has 129 stores. It plans to add 117 new stores, aiming to double offline reach by March 2028.
Profits Just Prior to IPO
To understand business profitability, IndAS EBITDA needs to be adjusted for store rentals and also factor in depreciation, as manufacturing is in-house. For simplicity, best to track PBT excluding other income:
On FY24 revenue of Rs. 986 cr, loss before tax, excluding other income, was at Rs. 46 cr. On FY25 revenue of Rs. 1,274 cr, this loss jumped to Rs. 67 cr, implying 5% net loss from operations. H1FY26 topline stood at Rs. 724 cr, with bottomline in the black - H1FY26 profit before tax excluding other income stood at Rs. 18 cr, implying 2.5% margin. Financial turnaround just prior to IPO is not confidence building, and besides this, margins being extremely slim, remains fragile.
Non-Financial Concerns
- CFO Resigned: Wakefit’s CFO, who had joined in a junior role in Feb 2021, and appointed as CFO in May 2025, has resigned with Dec 2025 being tentative last day. If Wakefit were already a listed company, this news was enough to spook the market. CFO’s tenure was barely 6 months while previous senior management team such as CMO and CFO have resigned within 2 years of their appointment, in the past.
- Stanley’s Struggles: Despite reality boom, furniture manufacturer-cum-retailer peer Stanley struggled with growth and profitability, post listing, due to store rentals and high inventory, among other things.
Outlook Going Forward
Wakefit’s 55% gross margin is higher than mattress peer Sheela Foam’s 45% but is comparable to Stanley Lifestyle’s 55%. But aggressive offline store expansion keeps net margin outlook bleak. Wakefit is deploying fresh capital to strengthen COCO stores, but offline margin is lower than online. Its mattress and sofa manufacturing capacity is ~80% utilized, possibly calling for additional capital in future. Lastly, Wakefit’s inventory rose by 60% in H1FY26 to Rs.260 cr, as of 30.9.25, from Rs. 164 cr, as of 31.3.25, despite an asset light store level inventory model. Last year’s H1FY25 earnings or inventory as of 30.9.24 not disclosed to judge sustainability of earnings or seasonality.
Unattractive Valuation
Wakefit’s m cap and enterprise value of about Rs. 6,400 cr, implies revenue multiple of 4.4x and a PE multiple of 85x. Such a high PE looks unsustainable and very well discounts future positives of operating leverage etc. Wakefit is yet to establish a profitability track record, as H1FY26 alone does not build confidence. Even on peer comparison, valuation is seen unattractive.
Bigger peer Sheela Foam, with brands Sleepwell and Kurlon, has 2x topline of Rs. 3,500 cr with a m cap of Rs. 6,600 cr and enterprise value of Rs. 7,000 cr, implying revenue multiple of 2x. Although profitability slipped in H1FY26, on FY25 basis, Sheela’s PE is at 66x. Stanley is ruling at a PE of 40x, with Rs. 440 cr topline and 8% net margin.
