Wakefit IPO Opens: Should You Apply? GMP, Review, Subscription Details Explained

Wakefit Innovations Ltd's IPO is open from December 8-10, with a price band of Rs 185-195 per share. The home furnishings company aims to raise Rs 1,289 crore for expansion, marketing, and other corporate purposes.

The much-awaited Initial Public Offering (IPO) of Wakefit Innovations Ltd, the Bengaluru-based home and furnishings brand known for its mattresses, opened for subscription today, December 8, and will remain open until December 10. The company has fixed its price band at Rs 185–Rs 195 per share, valuing Wakefit at around Rs 6,400 crore.

GMP Signals Positive Listing, But Analysts Advise Caution

Ahead of the issue opening, Wakefit was trading at a grey market premium (GMP) of Rs 36. If this trend holds, the stock could list around Rs 231 per share, an 18% jump over the upper IPO price of Rs 195.

The GMP has been moving upward consistently over the last nine sessions, hinting at a strong debut. However, experts caution that GMP is only an unofficial indicator of investor sentiment.

Earlier Fundraise and Share Allotment Plan

Before opening to the public, Wakefit raised Rs 186 crore from marquee investors including Steadview Capital, WhiteOak Capital, InfoEdge and Capital 2B.

The IPO allotment will be finalised on December 11, refunds will be issued on December 12, and shares will be credited to demat accounts the same day. Wakefit is scheduled to list on the NSE and BSE on December 15.

Who Can Apply and How Much?

The lot size is 76 shares, and investors can apply in multiples of 76.

The share allocation is as follows:

• QIBs: Not less than 75%
• NIIs: Up to 15%
• Retail investors: Up to 10%

IPO Review: Strong Revenue But Loss-Making; Swastika Says 'Avoid'

Despite its strong brand recall and rapid expansion, Wakefit continues to report losses.

Brokerage Swastika Investmart raised red flags, noting:

• A sizeable net loss expected in FY25
• Low single-digit EBITDA margins
• High marketing spends eroding profitability
• Negative EPS and negative return on net worth (RoNW)
• Competitors like Sheela Foam are financially stronger

Overall, the brokerage has rated the IPO as AVOID, citing high valuation despite weak profitability.

Issue Structure and How the Money Will Be Used

The IPO consists of:

• Fresh issue: Rs 377.18 crore
• Offer for Sale (OFS): 4.67 crore shares worth ~Rs 912 crore
• Total issue size: Rs 1,289 crore

Promoters Ankit Garg and Chaitanya Ramalingegowda, along with several institutional shareholders, will offload part of their stake. Promoter ownership will fall from 43.7% to about 37% post-issue.

Wakefit plans to deploy proceeds from the fresh issue for:

• Rs 31 crore: Opening 117 new COCO stores
• Rs 15.4 crore: New machinery and equipment
• Rs 161.4 crore: Lease and license fees for existing stores
• Rs 108.4 crore: Marketing and advertising
• Remaining funds: General corporate purposes

A Fast-Growing Indian Brand With Pan-India Reach

Founded in 2016, Wakefit has rapidly grown into one of India’s leading home and furnishings companies. As of March 2024, the brand crossed Rs 1,000 crore in revenue, supported by strong demand for mattresses, furniture and home accessories.

The company sells through:

• Its own website
• Company-owned retail stores
• Leading e-commerce platforms
• Multi-brand outlets

Wakefit operates five manufacturing units, two in Bengaluru, two in Hosur, and one in Sonipat.