Direct-to-consumer (D2C) home and furnishings company, Wakefit Innovations Limited, filed its draft red herring prospectus (DRHP) with capital markets regulator Securities and Exchange Board of India (SEBI) on Thursday to raise Rs 468.22 crore through an initial public offering (IPO).
The Bengaluru-based company’s proposed IPO comprises a fresh issue of equity shares worth up to Rs 468.22 crore and an offer for sale (OFS) of 58.4 million equity shares by existing shareholders, according to the DRHP filed with stock exchanges. The OFS will see participation from co-founder promoters Ankit Garg and Chaitanya Ramalingegowda, along with investors Peak XV Partners, Verlinvest S.A., Investcorp Growth Equity Fund, Redwood Trust, SAI Global, and Paramark Fund.
Peak XV is set to offload nearly 25 million shares, making up around 48.8% of the total OFS. Verlinvest and Investcorp Growth will divest 10 million and 5.45 million shares, respectively. Its co-founders, Garg and Ramalingegowda, will collectively sell 12.1 million shares in the OFS.
Notably, Elevation Capital is not participating in Wakefit’s OFS. Instead, the investor has parallelly been increasing its stake through secondary transactions, acquiring 203,000 shares from Wakefit employees at Rs 1,600 per share since 2025, valuing the transaction at around Rs 32.5 crore. This potentially signals Elevation’s continued confidence in the company’s long-term prospects.
Additionally, co-founders Garg and Ramalingegowda were allotted 2.6 million equity shares through a rights issue ahead of the planned listing, as per the DRHP.
Axis Capital Limited, IIFL Capital Services Limited, and Nomura Financial Advisory and Securities (India) Private Limited are serving as the book running lead managers. The equity shares are proposed to be listed on both BSE and NSE.
Wakefit’s IPO comes at a time when the company has posted a 21% y-o-y revenue growth to Rs 986 crore in FY24. The company also trimmed its net loss by 90% to Rs 15.05 crore in FY24 from Rs 145.68 crore in FY23. For the nine-month period ended December 31, 2024, Wakefit reported revenue from operations of Rs 971 crore, with a net loss of Rs 8.8 crore.
Wakefit plans to deploy the net proceeds from the IPO towards setting up 117 new company-owned company-operated (COCO) regular stores and one COCO jumbo store, requiring Rs 82 crore in capital expenditure. Another Rs 15.4 crore will be invested in new equipment and machinery. Rs 145 crore—nearly a third of the proceeds—will be allocated for lease payments and license fees for existing stores, while Rs 108.4 crore will fund marketing and brand-building initiatives.
Wakefit has built flexibility into its fundraising plan, with 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). If executed, the fresh issue size would be reduced proportionately.
Key risks highlighted in the DRHP include historical net losses, high dependence on the mattress category for revenue, and heavy reliance on its own sales channels.
Founded in 2016, the company operates as a full-stack vertically integrated entity, controlling every aspect from product conceptualisation and design to manufacturing, distribution and customer engagement. Wakefit runs five manufacturing facilities—two in Bengaluru (Karnataka), two in Hosur (Tamil Nadu), and one in Sonipat (Haryana).
In terms of product mix: mattresses contributed 62.2%, furniture 26.8%, and furnishings 10.9% of revenue in the first nine months of FY25. Since inception, the startup says it has served over 8.5 million customers and expanded its portfolio to over 100 categories and 6,000 stock-keeping units. Since its foray into offline retail in 2022, Wakefit now operates over 80 stores across 26 cities and plans to increase this to 120 stores in the next six months. The company distributes products through its website, retail stores, and e-commerce marketplaces such as Flipkart and Amazon.
Wakefit has raised over $148 million since inception from marquee investors. As per the DRHP, Peak XV is the largest external stakeholder with a 22.7% stake, followed by Verlinvest and Investcorp, which hold 9.89% and 9.39%, respectively. SAI Global Investment owns 5.35%, while Elevation Capital and Paramark Fund hold 4.73% and 1.65%, respectively. Among the promoters, Garg holds the largest share at 33.38%, followed by Ramalingegowda with a 10.09% stake.