IPO closes on 10 Dec'25
Wakefit Innovations Ltd
Minimum Investment
₹ 14,820 / 76 shares
Our Verdict:
Avoid
- Wakefit Innovations Ltd (Wakefit) has incurred losses over the past three financial years, even though revenue has grown steadily. EBITDA margins have remained in the low single digits in FY25 and FY24, reflecting modest operational efficiency.
- In term of valuations, the implied P/E of nearly 84x appears stretched for a company that has only just inched into profitability in Q1FY26. Such a premium is difficult to justify given the early stage of its earnings turnaround.
- Wakefit’s growth story is undeniably compelling. The company has scaled rapidly, captured meaningful market share in a still-maturing category and built a distribution ecosystem in a few years. The real question for investors, however, is whether Wakefit can convert this scale into consistent profitability and sustainable returns on capital.
- When compared with established peers like Sheela Foam, Wakefit’s financial profile lags considerably — with negative EPS, negative return on net worth and overall weaker balance sheet strength.
- While we acknowledge Wakefit’s strong brand presence and execution capabilities, the current rich valuations offer limited upside and do not adequately compensate for execution and profitability risks. Any potential listing gains will likely be driven more by market sentiment than the company’s core fundamentals.
- Considering these factors, long-term investors should wait for any post-listing correction before evaluating the stock at more reasonable valuations.
About the company
Founded in
1 Mar'16
Managing director
Ankit Garg
- Wakefit is a home and sleep-solutions brand catering to mass, masstige and premium consumers. The company offers over 3,000 SKUs across mattresses, beds, wardrobes, sofas, recliners, dining sets, soft furnishings and décor items — positioning itself as a comprehensive home-furniture and lifestyle solutions provider.
- Wakefit follows an omnichannel distribution strategy spanning its website, digital marketplaces and a fast-growing offline presence. It operates 125 COCO (Company-Owned Company-Operated) stores across 62 cities, supported by over 1,500 Multi-Brand Outlets (MBOs) in Tier-2 and Tier-3 markets. Its strong direct-to-consumer engine remains the backbone of its revenue model, with ~65% of income generated through its own channels — primarily its website and COCO stores. The remaining 35% comes from external marketplaces such as Amazon and Flipkart, along with offline multi-brand retail partners.
STRENGTHS
- Scalable Operating Model: Wakefit is one of India’s largest and fastest-growing D2C home and furnishing brands, supported by an integrated in-house model across design, manufacturing, warehousing, logistics and distribution. This allows tighter quality control, quicker product rollouts and greater cost efficiency than traditional offline-led players.
- Strong Revenue Growth: Revenue increased from Rs 812 crore in FY23 to Rs 1,273 crore in FY25, a CAGR of roughly 25%. Wakefit’s growth rate is nearly 1.6 times that of its organised competitors, showcasing its ability to expand faster in a fragmented market.
- High Customer Stickiness: Wakefit’s brand strength is reinforced by consistent product quality, reliable service and competitive pricing. Repeat revenue contributed ~35% in H1FY26, highlighting strong customer loyalty. Marketplace ratings remain robust — 4.4/5 for mattresses and 4.3/5 for furniture and furnishings.
- Asset-Light Offline Expansion: Wakefit’s COCO stores operate on a display-only, asset-light model that minimises working capital and enables swift network expansion. These stores deliver a ~79% higher Average Order Value (AOV) compared to website orders. The company now plans to set up 117 new COCO stores to further strengthen its offline footprint.
RISK FACTORS
- Weak Earnings Profile: Wakefit has reported losses for the past three fiscal years, turning profitable only in H1FY26. Additionally, the company recorded negative operating cash flows in FY23. If revenue growth slows or operating costs are not optimally controlled, the firm’s financial stability may come under pressure.
- Declining NAV: Wakefit posted a ROCE of -0.68% in FY25, reflecting inefficient capital utilisation. More concerning is the decline in Net Asset Value (NAV) per share, which fell from Rs 19.48 in FY23 to Rs 16.96 in FY25. In simple terms, despite rapid growth, the value accruing to shareholders is shrinking — signalling that profitability has not converted into real wealth creation.
- High Dependence on Mattresses: ~60% of Wakefit’s revenue comes from mattresses, making it heavily reliant on a single product category. Any adverse shift in consumer preferences, supply-chain disruptions or intensified competition in mattresses could materially impact the company's operating performance.
- Highly Competitive and Fragmented Industry: The Indian home and furnishings market is intensely competitive and dominated by unorganised players. Wakefit competes with local retailers offering non-branded products as well as established national brands. This fragmentation may restrict pricing power, increase customer acquisition costs and compress margins over time.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 1,288.89 crore
Fresh Issue
₹ 377.18 crore
OFS
₹ 911.71 crore
Price range
₹ 185 - 195
Lot size
76 shares
Issue Objective
The net proceeds from the fresh issue will be utilised for the following purposes:
- Capital expenditure towards setting up 117 new COCO – Regular Stores;
- Expenditure for lease, sub-lease rent and license fee payments for existing COCO – Regular Stores;
- Capital expenditure towards purchase of new equipment and machinery;
- Marketing and advertisement expenses; and
- General corporate purposes.
Dates
Bidding open
8 Dec'25
Bidding close
10 Dec'25
Allotment date
11 Dec'25
Refund date
12 Dec'25
Listing
15 Dec'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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