Title: Wakefit's IPO Plans: Cash Injection for Offline Expansion and Brand Building
Wakefit submits a draft Red Herring Prospectus to SEBI for an offer amounting to approximately 4680 million Indian rupees.
Wakefit Innovations Limited, a direct-to-consumer (D2C) home and furnishings company, announced its plans to raise funds through an initial public offering (IPO) worth Rs 468.22 crore. This move follows a stellar revenue growth of 21% year-on-year to reach Rs 986 crore in FY24 and a remarkable trimming of their net loss by 90%.
Based in Bengaluru, Wakefit's proposed IPO will feature a fresh issue of equity shares worth up to Rs 468.22 crore and an offer for sale (OFS) by existing shareholders. Peak XV Partners will offload nearly 25 million shares, terms which account for about 48.8% of the OFS. Verlinvest S.A., Investcorp Growth, and the co-founders Ankit Garg and Chaitanya Ramalingegowda will also participate in the OFS.
Interestingly, Elevation Capital, which has been a significant investor in Wakefit, is not participating in the OFS. Instead, Elevation has been acquiring shares from employees since 2025, indicating their continued belief in Wakefit's future prospects.
In the DRHP, co-founders Garg and Ramalingegowda have been allotted 2.6 million equity shares through a rights issue ahead of the planned listing. Axis Capital Limited, IIFL Capital Services Limited, and Nomura Financial Advisory and Securities (India) Private Limited are serving as the book running lead managers, with the equity shares expected to be listed on both BSE and NSE.
Wakefit aims to utilize the net proceeds from the IPO to intensify its offline expansion by adding 117 COCO regular stores and one COCO jumbo store, requiring an investment of Rs 82 crore in capital expenditure. Another Rs 15.4 crore will be spent on new equipment and machinery. About a third of the proceeds, amounting to Rs 145 crore, will be allocated for lease payments and license fees for existing stores, while a considerable Rs 108.4 crore will go towards marketing and brand-building initiatives.
It's intriguing to note that Wakefit reserves the option to undertake a pre-IPO placement of up to Rs 93.6 crore prior to filing the red herring prospectus with the Registrar of Companies (RoC), thereby reducing the fresh issue size proportionately.
Although the company faces challenges such as historical net losses, high dependence on the mattress category for revenue, and heavy reliance on its own sales channels, it's evident that Wakefit is boldly embracing the next phase of growth with its strategic fund deployment plan. By aggressively expanding its physical retail footprint and investing in brand-building initiatives, Wakefit is solidifying its position in the mattress and home furniture market and setting itself up for long-term success.
[1] Wakefit's Offline Expansion Plans: Expanding Retail Footprint with 118 Stores - Link
[2] Wakefit’s IPO Funds Allocation: Breakdown of Utilization - Link
[3] Wakefit’s Brand-Building Strategy: Investing in Marketing Campaigns - Link
[4] Wakefit's Growth Strategy: Leveraging Offline and Online Sales Channels - Link
[5] Wakefit's Plan to Dominate the Mattress and Home Furnishings Market - Link
- Wakefit's initial public offering (IPO) will include a fresh issue of equity shares worth up to Rs 468.22 crore and an offer for sale (OFS) by existing shareholders, with the funds to be utilized for various purposes such as offline expansion, marketing, brand-building, and license fees.
- To execute its strategy for offline expansion, Wakefit plans to add 117 COCO regular stores and one COCO jumbo store, requiring an investment of Rs 82 crore in capital expenditure.
- The company also intends to spend approximately Rs 108.4 crore on marketing and brand-building initiatives, aiming to solidify its position in the mattress and home furniture market.
- With the IPO funds, Wakefit hopes to invest not only in physical retail footprint expansion but also in its digital growth, leveraging both online and offline sales channels to achieve long-term success in the finance, business, and Defi sectors.
