Mon Dec 08 03:50:00 UTC 2025: ## Wakefit IPO Opens Today: Should You Invest in the “Sleep Unicorn”?

Bengaluru, India – December 8, 2025 – Wakefit, India’s largest direct-to-consumer (D2C) home furnishings company, launched its Initial Public Offering (IPO) today, seeking to raise ₹1,289 crore. The IPO will remain open for subscription until December 10th, 2025. The offering includes a fresh issue of shares worth ₹377 crore and an offer for sale (OFS), allowing founders and early investors like Peak XV Partners to partially cash out.

Founded in 2016 by Ankit Garg and Chaitanya Ramalingegowda, Wakefit has rapidly grown from a Bengaluru-based mattress brand to a nationwide player with over ₹1,270 crore in annual revenue, reaching over 700 districts. The company operates in the mattresses (61% of sales), furniture (28%), and home furnishings (11%) segments.

Wakefit distinguishes itself as a full-stack, vertically integrated company, handling everything from design to distribution. Approximately 65% of its revenue comes from its own website and company-operated stores, with the remaining 35% generated through marketplaces like Amazon and Flipkart, and multi-brand offline outlets. While revenue has seen a Compound Annual Growth Rate (CAGR) of roughly 25% between FY23 and FY25, profitability remains a concern.

While recent half-year results (H1 FY26) show a net profit margin of 4.9%, translating to about ₹35 crore in profit, the company reported net losses in the previous three fiscal years: ₹35 crore in FY25, ₹15 crore in FY24, and ₹145 crore in FY23. This raises questions about the sustainability of its current profitability.

One reason for these losses is Wakefit’s rapid expansion of retail stores. As a leased asset, the store causes depreciation, which significantly impacted profitability in FY25. Half of the IPO’s proceeds will be directed towards opening more stores and managing lease expenditures, suggesting that future depreciation costs could continue to affect the bottom line.

Furthermore, Wakefit’s Return on Capital Employed (ROCE) in FY25 was negative (-0.68%), and its Net Asset Value (NAV) per share has decreased from ₹19.48 in FY23 to ₹16.96 in FY25, indicating that shareholders’ value is eroding.

The IPO price band is set at ₹195 per share, giving Wakefit a post-listing valuation of approximately ₹6,300 crore. This is relatively high. Though Sheela Foam trades at a P/E of 77x, that company has stronger operating profit margins (8.32% EBITDA vs Wakefit’s 7.13%), and a much longer operating history. So despite Wakefit’s narrative of being more efficient, the numbers suggest otherwise.

Analysts suggest that investing in Wakefit at this stage relies heavily on the expectation of continued revenue growth and future margin improvements, rather than on the strength of its current financial performance. Investors should carefully consider the risks associated with the company’s capital-heavy expansion strategy and its ability to achieve sustainable profitability as it transitions from a venture-backed startup to a publicly accountable entity.

Disclaimer: This article is for informational purposes only and should not be considered investment advice. Always conduct thorough research and consult with a financial advisor before making investment decisions.

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