Wakefit IPO Day 2 Highlights: Issue booked 39%. GMP falls sharply. Should you apply or skip?

Wakefit IPO was booked 39% on the second day of bidding. The QIB segment did not see any bids. The NII portion was subscribed 25% and the retail quota 1.77 times.

Wakefit IPO Day 2 LIVE: The company is led by its promoters, Ankit Garg (Chairperson & CEO) and Chaitanya Ramalingegowda (Executive Director). Mr. Garg holds a degree in chemical engineering from IIT Roorkee, and both promoters have a strong entrepreneurial track record, having founded and scaled the company since its inception in 2016.

Wakefit IPO Day 2 LIVE: According to Indsec Securities, at an upper price band of ₹195, Wakefit Innovations is valued at a P/S of 4.4x on FY26 annualized basis which is at a significant premium versus its listed peer Sheela Foams (P/S of 1.8x). Positively for Wakefit growth is visible on back of improving housing demand, increasing discretionary spending and successful expansion of its COCO stores.

“We are cautious due to higher relative valuations versus Sheela Foams (Sleepwell and Kurl-on), dominance of unorganized players, and supply side risk pertaining to RM imports. We thus assign a “Subscribe for Long-Term” rating to the issue,” said the brokerage.

Wakefit IPO Day 2 LIVE: Wakefit IPO subscription status is 34% on day 1. The retail portion is subscribed 1.57x, and NII portion has been booked 18%, Qualified Institutional Buyers (QIBs) portion is yet to receive bids.

The company has received bids for 1,22,20,420 shares against 3,63,53,276 shares on offer, at 14:57 IST, according to data on BSE.

Wakefit IPO Day 2 LIVE: SMC Global stated that since the company is operating at a loss, we are taking the P/BV valuation into consideration. Evaluating the P/B ratio at the upper end of Rs. 195, the pre-issue book value is Rs. 18.09, resulting in a P/B of 10.78x. After the issue, the book value will be Rs. 28.56, leading to a P/B of 6.83x.

When examining the P/B ratio at the lower end of Rs. 185, the pre-issue book value remains Rs. 18.09, which results in a P/B of 10.23x. Post-issue, the book value will be Rs. 28.56, corresponding to a P/B of 6.48x.

Wakefit IPO Day 2 LIVE: The company is positioned for strong growth driven by its leadership in the D2C home solutions market, rapid store expansion, and data-driven product innovation. Its integrated operations, omnichannel network, and marketing efficiency support scale and customer loyalty. However, heavy reliance on the Wakefit brand and mattress segment, past losses, cash-flow pressures, and logistics dependencies pose ongoing risks. Successful diversification and premiumisation will be key to sustaining momentum.

Wakefit IPO Day 2 LIVE: Key strategies of the firm to know:

1. Expand COCO–Regular Stores and strengthen website-led sales
2. Data-driven product category expansion with scaled operations
3. Strengthen brand salience and broaden portfolio through a house-of-brands approach
4. Leverage technology to enhance customer experience and operational efficiency
5. Increase customer lifetime value through cross-selling and premiumisation

Wakefit IPO Day 2 LIVE: Founded in 2016, Wakefit is one of the quickest emerging brands in the home and furnishings sector in India, achieving a total income exceeding ₹1,000 crore by March 31, 2024, compared to organized competitors.

Wakefit has five manufacturing plants, with two located in Bengaluru, Karnataka, another two in Hosur, Tamil Nadu, and one in Sonipat, Haryana.

Wakefit IPO Day 2 LIVE: Key Strengths of the firm

1. Largest and fastest-growing D2C home and furnishing solutions brand
2. Comprehensive home solutions brand with strong product innovation
3. Full-stack, vertically integrated operations with strong technical capabilities
4. Omnichannel presence with a well-located store network
5. Multi-faceted marketing approach strengthening brand equity

Wakefit IPO Day 2 LIVE: 3 Key risks to consider:

1. Highly competitive intensity: The company faces stiff competition, especially from unorganized local and unbranded sellers. These players could put pricing pressure on the company by selling products at significantly cheaper prices owing to better raw material procurement prices and efficient supply chain, leading to increased competitive intensity.
2. Seasonality driven sales: Company has experienced high demand for its products during festive season. Failure to accurately forecast demand or disruption in supply chain during peak demand season could affect profitability and cash flows.
3. Lower margins due to Jumbo COCO stores: The company intends to expand its presence through Jumbo COCO stores. These stores would require large capital expenditure due to high operational costs, thereby diluting margins.

Wakefit IPO Day 2 LIVE: Key points

1. Omnichannel Expansion: Aggressive shift to physical COCO (Company Owned, Company Operated) stores to capture the large unorganised market and allow customers to 'touch and feel' products.
2. Diversified Portfolio: Expansion into furniture and furnishings (beyond mattresses) to increase Average Order Value (AOV) and reduce reliance on a single category.
3. Financial Turnaround: Demonstrated recent shift to net profitability ( ₹35.5 Cr profit in H1 FY25), validating scalability and unit economics.
4. Strong D2C Foundation: Vertically integrated, cost-efficient model allows for competitive pricing and establishes the company as a top organised player.
5. Favourable Market: Growth Positioning to capture growth in India's ₹3 lakh crore home and furnishings market, projected to grow at 11-13% CAGR.

Wakefit IPO Day 2 LIVE: According to Kunvarji Finstock, at the upper price band of Rs. 195, WakeFit Innovations Ltd. is valued at a P/S multiple of 5.5x based on FY25 sales. Given the company’s expansion plans, expanding margins, scalable business model, and industry growth potential, we believe the valuation is justified.

“Thus, we recommend a “SUBSCRIBE” rating for this issue with a medium to long-term investment horizon,” said the brokerage.

Wakefit IPO Day 2 LIVE: Wakefit IPO subscription status is 22% on day 1. The retail portion is subscribed 1.05x, and NII portion has been booked 10%, Qualified Institutional Buyers (QIBs) portion is yet to receive bids.

The company has received bids for 79,65,940 shares against 3,63,53,276 shares on offer, at 10:45 IST, according to data on BSE.

Wakefit IPO Day 2 LIVE: Wakefit Innovations Ltd has raised ₹186 crore from three investors: Steadview Capital, WhiteOak Capital, and Temasek-backed Capital 2B, in anticipation of its initial public offering. In this transaction, Steadview Capital Mauritius, WhiteOak Capital, and Capital 2B acquired a total of 95.57 lakh equity shares at a price of ₹195 each, as stated in a public announcement by Wakefit. Specifically, Steadview Capital bought shares worth ₹101 crore, WhiteOak invested ₹72 crore, and Capital 2B contributed ₹13 crore.

Wakefit IPO Day 2 LIVE: In the public offer, Wakefit has allocated no less than 75% of the shares for qualified institutional buyers (QIB), a maximum of 15% for non-institutional investors (NII), and up to 10% reserved for retail investors.

Wakefit IPO Day 2 LIVE: The basis for allotment of shares for the Wakefit Innovations IPO will be determined on Thursday, December 11, and refunds will be processed on Friday, December 12. Shares will be credited to the demat accounts of allottees on the same day as the refunds. Wakefit Innovations shares are expected to debut on the BSE and NSE on Monday, December 15.

Wakefit IPO Day 2 LIVE: Wakefit IPO GMP today is ₹5. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Wakefit is indicated at ₹200 apiece, which is 2.56% higher than the IPO price of ₹195.

Based on the activities in the grey market over the past nine sessions, the present GMP ( ₹5) is indicating a downward trend. The minimum GMP recorded is ₹0.00, while the maximum is ₹36, as stated by experts.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.