Wakefit IPO Review: Subscribe or Avoid? | Detailed Analysis
Should you invest in Wakefit? We analyze the ₹185-195 price band, recent profitability turnaround, and valuations. Get our expert verdict here.
Wakefit Innovations IPO Details
Price Band: ₹185 – ₹195 per share
Lot Size: 76 Shares
Minimum Investment: ₹14,820 (at upper band)
Pre-IPO Placement Price: ₹195 (Important benchmark)
1. Wakefit — Financial Health & Performance
Revenue Growth:
Wakefit has demonstrated impressive top-line growth.
Revenue from operations grew from ₹8,126 million (FY23) to ₹9,863 million (FY24) and ₹12,736 million (FY25).
The revenue for H1 FY26 stands at ₹7,240 million.
CAGR of ~25%, which significantly outpaces the industry average.
Profitability Turnaround — This is the most critical factor.
loss-making in FY23, FY24, and FY25 (Loss of ₹350 million).
However, for H1 FY26, Wakefit posted a Profit After Tax (PAT) of ₹355.74 million.
Turnaround driven by operating leverage and reduced burn.
EBITDA Margins: EBITDA has improved drastically.
FY23: Negative
FY25: 7.13%
H1 FY26: 14.25%. The doubling of EBITDA margins in the latest half-year suggests the company has achieved economies of scale.
2. Valuation Analysis of Wakefit
P/E Ratio: Since the company was loss-making in FY25, a trailing P/E cannot be calculated. However, if we annualize the H1 FY26 Earnings Per Share (EPS) of ₹1.15 to approx ₹2.30 for the full year:
Forward P/E: ₹195 / ₹2.30 ≈ 84.7x.
Peer Comparison: Sheela Foam (Sleepwell) as a peer, trades at a P/E of 100x+.
Assessment: Wakefit is asking for a valuation lowerr than the established market leader (Sheela Foam). However, Wakefit is growing much faster (29% vs Sheela Foam’s single digits/low double digits) and is a D2C-first brand, which typically commands a scarcity premium.
Pre-IPO Benchmark: The company placed shares with institutional investors (like DSP India Fund) at ₹195 per share in November 2025. The IPO upper band matches this price exactly, suggesting the pricing is fair relative to what institutions recently paid.
3. Business Strengths of Wakefit (The “Buy” Case)
Omnichannel Strategy: Unlike pure e-commerce plays that struggle to scale, Wakefit has successfully expanded offline. Revenue from offline channels (COCO stores) is now ~40%, while online is ~60%. This hybrid model reduces dependency on digital marketing costs.
Market Leadership: They are the largest D2C home and furnishings company in India by revenue.
Vertical Integration: They manufacture their own mattresses and furniture (full-stack), which allows better quality control and higher gross margins compared to trading companies.
Category Expansion: They have successfully moved beyond just mattresses into furniture (sofas, wardrobes) and home decor, increasing the “Share of Wallet” per customer.
4. Key Risks (The “Caution” Case)
Sustainability of Profits: The company has only just turned profitable in the last 6 months (Sept 2025). Investors need to be confident that this is not a one-off pre-IPO window dressing but a sustainable trend.
Competitive Landscape: The sector is highly competitive with unorganized players, legacy brands (Sleepwell, Kurlon), and deep-pocketed competitors like IKEA.
OFS Component: A large portion of the IPO is an Offer For Sale (OFS) by early investors (Peak XV, Verlinvest). While profit-booking is normal, heavy selling can sometimes signal limited upside in the near term.
5. Final Verdict: Subscribe for Long Term?
Subscribe for Long Term — A polite way of saying that the value in the short to medium term is already captured by the seller. Nothing much for the investor in the IPO.
Recommendation: You decide for yourself if you want to subscribe for the long term