Home and sleep solutions startup Wakefit Innovations has won regulatory approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO).
The SEBI approval comes via issuance of its observations on the draft red herring prospectus (DRHP), which is the green signal for the company to launch its public issue.
Wakefit is among six companies cleared by SEBI recently, alongside Lenskart, Tenneco Clean Air India, Waterways Leisure Tourism, Shree Ram Twistex, and Lamtuf.
IPO Structure & Key Details
Here are the notable elements of Wakefit’s public issue plan:
- Fresh Issue: ₹468.2 crore will be raised through a new equity issuance.
- Offer for Sale (OFS): Existing shareholders (promoters, early investors) will sell up to 5.84 crore shares.
- Selling Stakeholders: Promoters Ankit Garg and Chaitanya Ramalingegowda, along with investors like Peak XV Partners, Verlinvest, Investcorp, and others, will participate in the OFS.
- Use of Funds: Proceeds from the fresh issue are earmarked for expanding Wakefit’s retail footprint (new stores), lease and license payments, equipment procurement, marketing & advertising, and general corporate needs.
- Manufacturing & Operations: Wakefit currently operates across multiple manufacturing facilities (in Karnataka, Tamil Nadu, Haryana) and sells via D2C channels, offline stores, and online platforms.
- Financials (Recent Periods): For the nine months ended December 2024, Wakefit’s revenue stood around ₹971–986 crore with a net loss of approximately ₹9 crore.
- Lead Managers: The IPO’s book-running lead managers are Axis Capital, IIFL Capital, and Nomura.
Strategic Implications & What to Watch
1. Growth & Expansion Play
This IPO gives Wakefit access to public capital, which can fuel its expansion in offline retail, enhance product reach, invest in supply chain, and boost brand marketing efforts.
2. Exit Opportunity for Investors
The OFS component allows existing investors and early backers to partially exit, unlocking liquidity and perhaps reevaluating their stakes in the business.
3. Market Sentiment for D2C / New-Age IPOs
Wakefit joining Lenskart and other startups in securing SEBI approval indicates robust appetite and regulatory support for direct-to-consumer and consumer technology companies going public.
4. Performance Pressure
With past years showing losses, Wakefit will face pressure to turn around financially after listing. The trajectory from here needs to convince public investors.
5. Timing & Market Conditions
The company has 12 months from SEBI approval to launch the IPO. Market conditions, interest rates, and investor sentiment in that period will influence valuation and success.
