Wakefit IPO Day 2: Issue subscribed 36% so far. Check GMP, key dates, review. Should you apply or not?

Wakefit IPO Day 2: The home and furnishings firm Wakefit Innovations Ltd saw a 15% subscription rate on the first day of its initial public offering on Monday, December 9. The overall response to the subscription has been lukewarm, although there has been a good response from retail investors.

Wakefit IPO price band has been set between ₹185 and ₹195 per share, valuing the Bengaluru-based company at around ₹6,400 crore.

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.

Prior to the public subscription opening for its initial share sale, Wakefit IPO secured ₹186 crore from three investors: Steadview Capital, WhiteOak Capital, InfoEdge, and Capital 2B, which is backed by Temasek.

Wakefit IPO lot size is 76 equity shares, and additional shares can be acquired in multiples of 76. In the public offering, Wakefit has designated 75% of the shares for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and 10% allocated for retail investors.

The initial allotment of shares for the Wakefit IPO will be determined on Thursday, December 11, with refunds being processed on Friday, December 12. Shares will be credited to the demat accounts of allottees on the same day that refunds are issued. Wakefit Innovations shares are anticipated to be listed on the BSE and NSE on Monday, December 15.

Wakefit IPO GMP today

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.

Wakefit IPO review

Swastika Investmart has pointed that the company continues to experience losses, with a notable net loss expected for FY25 despite a rise in revenue. The EBITDA margin remains low, highlighting limited operational efficiency and substantial marketing costs.

The brokerage pointed out that, unlike established competitors such as Sheela Foam, Wakefit shows negative earnings per share, a negative return on net worth, and weaker financial stability. Even though the company is struggling with losses, its valuation appears elevated when evaluated against profitability and return metrics. Given the lack of profitability, negative return on net worth, and high valuation, the brokerage has issued an AVOID rating for this IPO.

BP Equities indicated that at the upper price band of ₹195, WakeFit Innovations Ltd. is priced at a P/S ratio of 5.5x based on FY25 revenue. Considering the company’s growth strategies, improving margins, scalable business model, and the potential for industry growth, we feel the valuation is warranted. Therefore, the brokerage suggests a “SUBSCRIBE” rating for this offering with a medium to long-term investment perspective.

Wakefit IPO Subscription status

Wakefit IPO subscription status is 39% on day 2. The retail portion is subscribed 1.77x, and NII portion has been booked 25%, Qualified Institutional Buyers (QIBs) portion is yet to receive bids.

The company has received bids for 1,41,81,448 shares against 3,63,53,276 shares on offer, at 17:00 IST, according to data on BSE.

Wakefit IPO subscription status was 15% on day 1.

Wakefit IPO details

The public offering comprises a fresh issuance of equity shares totaling ₹377.18 crore and an offer-for-sale (OFS) of 4,67,54,405 shares, estimated at around ₹912 crore, which collectively amounts to ₹1,289 crore for the entire issue.

Promoters Ankit Garg and Chaitanya Ramalingegowda, along with other selling shareholders like Nitika Goel, Peak XV Partners Investments VI, Redwood Trust, Verlinvest SA, SAI Global India Fund I LLP, and Paramark KB Fund I, will participate in the OFS to divest their shares.

Following the share sale, the promoters’ stake will reduce to approximately 37% from the existing 43.70%.

Wakefit intends to allocate ₹31 crore from the new issuance towards the establishment of 117 new COCO-Regular Stores; ₹15.4 crore for the purchase of new equipment and machinery; and ₹161.4 crore for lease, sub-lease rent, and license fee payments related to existing stores.

In addition, ₹108.4 crore will be set aside for marketing and advertising initiatives aimed at enhancing brand recognition and visibility, while the remaining funds will be utilized for general corporate activities.

Axis Capital, IIFL Capital Services, and Nomura Financial Advisory and Securities (India) are acting as the merchant bankers for the Wakefit Innovations IPO, with MUFG Intime India Pvt. Ltd. serving as the registrar for the issue.

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.