Wakefit Innovations Files DRHP for ₹468 Crore IPO: Unpacking the Strategy for Growth

Wakefit Innovations, the Bengaluru-based home and furnishings brand, has officially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO). This strategic move signals the company's intent to bolster its market presence and fund its aggressive expansion plans within India's rapidly growing home furnishings sector. The proposed offering seeks to raise ₹468.2 crore through a fresh issue of equity shares, alongside a significant Offer for Sale (OFS) by existing stakeholders.

IPO Structure and Shareholder Exit

The IPO is structured with a fresh issuance of equity shares totalling up to ₹468.2 crore. This is complemented by an Offer for Sale (OFS) of 5,83,99,085 equity shares, equating to approximately 5.83 crore shares, from current investors and promoters.

Notable shareholders offloading stakes include company promoters Ankit Garg and Chaitanya Ramalingegowda, along with key investors such as Peak XV Partners, Verlinvest S.A., Investcorp funds, Nitika Goel, Redwood Trust, SAI Global India Fund I LLP, Investcorp Growth Opportunity Fund, and Paramark KB Fund.

The company has also indicated that it is considering a pre-IPO placement of up to ₹93.6 crore, which could potentially reduce the size of the fresh issue portion.

Strategic Allocation of IPO Proceeds

The funds generated from the fresh issue are earmarked for several key growth initiatives. A substantial ₹82 crore is planned for capital expenditures to establish 117 new Company-Owned, Company-Operated (COCO) Regular Stores and one COCO Jumbo Store, significantly expanding its retail footprint.

Further capital expenditure includes ₹15.4 crore for the acquisition of new equipment and machinery, indicating an investment in production capabilities. Additionally, a considerable ₹145 crore has been allocated for lease, sub-lease rent, and license fees for its existing stores, ensuring operational stability.

Marketing and advertising efforts aimed at enhancing brand awareness and visibility will receive ₹108.4 crore. Any remaining capital will be directed towards general corporate purposes.

Click here to explore other Upcoming IPOs

Key Advisors and Market Listing

The IPO process is being managed by a consortium of reputable financial institutions serving as Book Running Lead Managers. These include Axis Capital Limited, IIFL Capital Services Limited, and Nomura Financial Advisory and Securities (India) Private Limited. Upon completion, the equity shares of Wakefit Innovations are proposed to be listed on both the BSE and NSE, integrating them into India's premier stock exchanges.

Wakefit's Ascendancy in Home Furnishings

Founded in 2016, Wakefit has swiftly established itself as the fastest-growing indigenous brand within India's organised home and furnishings sector among organised competitors.

The company operates as a full-stack, vertically integrated brand, managing the entire value chain from product design and manufacturing to customer delivery and experience. Its diverse product portfolio encompasses mattresses, furniture, and various home accessories. These products are distributed through a dual-channel approach: its proprietary platforms, including its website and COCO stores, and external channels such as prominent e-commerce sites and multi-brand retailers.

Wakefit’s operational backbone includes five manufacturing plants, two in Bengaluru, two in Hosur, Tamil Nadu, and one in Sonipat, Haryana, equipped with advanced imported machinery and automation technologies like robotic arms and roller belts to optimise production and minimise waste.

Robust Financial Performance

Wakefit's financial trajectory underscores its rapid growth. For the fiscal year ending March 31, 2024, the company reported a revenue from operations of ₹986.3 crore. Furthermore, for the nine-month period concluding December 31, 2024, the revenue from operations stood at ₹971 crore. The company achieved a total income exceeding ₹1,000 crore by March 31, 2024, marking a significant milestone.

Check out other upcoming IPO's: Crizac IPO

Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here