Wakefit Innovations, a prominent direct-to-consumer (D2C) brand in the home and sleep solutions segment, has officially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO). The company is looking to raise a significant sum of ₹468.2 crore through a fresh issue of equity shares, with an additional offer-for-sale (OFS) component by existing shareholders.

The IPO comprises a fresh issue of equity shares aggregating up to ₹468.2 crore and an Offer for Sale of 5.83 crore equity shares by selling shareholders, which include promoters Ankit Garg and Chaitanya Ramalingegowda, along with key investors such as Peak XV Partners Investments VI, Redwood Trust, and Verlinvest S.A. This move marks a significant milestone for the Bengaluru-based firm, which has rapidly grown since its inception in 2016.

The proceeds from the fresh issue are earmarked for a strategic expansion of Wakefit's operations. A substantial portion, approximately ₹82.1 crore, is allocated for funding capital expenditure to establish 117 new Company-Owned, Company-Operated (COCO) regular stores and one COCO – Jumbo Store. Another ₹15.4 crore will be used for the purchase of new equipment and machinery, while ₹145 crore is designated for lease, sub-lease rent, and license fee payments. Furthermore, ₹108.4 crore will be invested in marketing and brand visibility initiatives, with the remaining funds slated for general corporate purposes.

Wakefit has demonstrated impressive financial performance leading up to this IPO. For the fiscal year ended March 31, 2024 (FY24), the company reported a total income exceeding ₹1,000 crore, a 21.9% rise from the previous fiscal. Importantly, Wakefit has also made significant strides towards profitability, notably narrowing its loss to ₹15.05 crore in FY24, a substantial improvement from ₹145.68 crore in FY23. The company also claimed to have achieved EBITDA profitability of ₹65 crore in FY24, signaling a robust business model.

Founded by Ankit Garg and Chaitanya Ramalingegowda, Wakefit has established itself as a full-stack, vertically integrated company. This model allows them to control every aspect of their operations, from product conceptualization, design, and manufacturing in their five facilities across Karnataka, Tamil Nadu, and Haryana, to distribution and customer engagement. Their product portfolio spans a wide range of home furnishings, including mattresses, furniture, pillows, and other home décor items, sold through both their own channels and major e-commerce platforms.

The company's direct-to-consumer (D2C) approach has been a cornerstone of its success, enabling it to offer quality products at competitive prices by eliminating middlemen. Wakefit's focus on customer experience is also evident in its 100-night trial period for mattresses and robust customer support.

The Indian home and furnishings market, valued at approximately ₹2.8 lakh crore as of 2024, is projected to grow at a Compound Annual Growth Rate (CAGR) of 13% to reach ₹5.9 lakh crore by 2030. This growth is driven by factors such as the expansion of organized retail, increasing online penetration, and a growing consumer preference for premium products. Wakefit, as a leading player in this burgeoning market, is well-positioned to capitalize on these trends.

Axis Capital Limited, IIFL Capital Services Limited, and Nomura Financial Advisory and Securities (India) Private Limited have been appointed as the Book Running Lead Managers to the issue. The equity shares of Wakefit Innovations are proposed to be listed on both the BSE and the National Stock Exchange (NSE), marking its public debut in the dynamic Indian capital market. This IPO represents a pivotal moment for Wakefit as it seeks to accelerate its growth trajectory and further solidify its market leadership.