Wakefit’s ₹1,300 Cr IPO Opens Dec 8: Is the Sleep Economy Waking Up?

There is another fresh D2C (Direct-to-consumer) entry in the Indian primary market. Wakefit Innovations Limited is preparing to open its IPO for subscription on December 8, 2025.

The Bengaluru-based home and sleep solutions provider, backed by marquee investors like Peak XV Partners (formerly Sequoia India) and Verlinvest, has filed its RHP (Red Herring Prospectus) with the Registrar of Companies. The subscription is expected to close on Dec 10, with a single-day anchor book opening on Dec 5.

The IPO size is estimated to be close to ₹1,300 cr. The IPO comprises a fresh issue of equity shares worth ₹377.1 cr and an OFS (Offer for Sale) of up to 4.67 cr equity shares by existing shareholders.

In its recent pre-IPO placement, it raised ₹56 cr from DSP India Fund and 360 ONE Equity Opportunities Fund at a price of ₹195/share. Now, the company is eyeing a valuation of ~₹6,373 cr. Scheduled for Dec 15, Wakefit will be listed on both the BSE and NSE.

The company has posted a profit of ₹35.5 cr on a revenue of ₹724 cr for the six months ended Sep 2025. So, there is an important critical question for investors. Is this financial turnaround sustainable enough to justify the premium valuation in a crowded home solutions market?

Is the Omnichannel Pitch Solid?

Wakefit has aggressively diversified its portfolio beyond mattresses. Wakefit has added furniture, home décor, lighting and more such products to its portfolio. But the most important strategic shift is its shift from being a pure-play online brand to a strong omnichannel retailer.

The utilisation of the fresh issue proceeds is telling the story of this physical expansion. A huge portion of the capital raised is earmarked specifically for establishing new brick-and-mortar touchpoints.

The management intends to use the funds to set up over a hundred new "COCO" (Company Owned Company Operated) stores across the country. Also, a large chunk of the fresh capital will go towards lease, sub-lease rent, and licence fee payments for these existing and upcoming stores.

Thus, Wakefit is betting that the increase in sales volume and brand equity will outweigh the operational overheads by committing heavily to an asset-heavy retail model.

So, can Wakefit execute this high-capex retail strategy without burning through its cash reserves too quickly?

The Financial Turnaround

In the fiscal year ended Mar 2025, the company reported a widened loss compared to the previous year, despite a healthy surge in revenue. However, the current fiscal year is telling a different story.

• For the first half of the fiscal year ending Sept 2025, Wakefit reported a healthy net profit.
• The swing from loss to profit just months before the IPO can be a positive signal. It can suggest that the company’s operating leverage is finally kicking in.
• The revenue growth has also remained robust.

Yet, investors can scrutinise the quality of this profit. Are the structural operational efficiencies driving it? Or have the pre-IPO cost-cutting measures resulted in profit?

The challenge for Wakefit might be to maintain this newfound profitability while simultaneously ramping up spending on new stores and brand visibility.

The Stake Sell Signal

Promoters Ankit Garg and Chaitanya Ramalingegowda are paring their stakes, alongside the major institutional backers.

Peak XV Partners, the largest shareholder after the promoters, is offloading a portion of its holdings. Other major investors, including Verlinvest and Investcorp, are also participating in the OFS.

It is worth noting that despite the sale, the promoters and main investors would continue to hold a considerable majority stake in the company. Thus, they would be aligning their interests with new shareholders. The domestic institutional investors’ entry, like DSP India Fund and 360 ONE, in the pre-IPO round has also added a layer of validation to the valuation. So, does the Wakefit IPO represent a test case for the maturity of India's D2C sector?

Source

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