Wakefit IPO: D2C growth story, key risks ahead, what investors should know

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Wakefit Innovations IPO: Wakefit Innovations, a D2C home and sleep solutions company, is set to launch its maiden public issue on Monday, December 8, 2025. The ₹1,288.9 crore public issue comprises a fresh issue of 19.3 million shares aggregating to ₹377.18 crore, and an offer for sale (OFS) with investors divesting up to 46.8 million shares worth ₹911.7 crore.

 

Wakefit Solutions IPO will be offered at a price band of ₹185 to ₹195 per share. The minimum application size has been set at 76 shares per lot. The issue will remain open for subscription till Wednesday, December 10, 2025. The company’s shares are tentatively scheduled to make their D-Street debut on Monday, December 15, 2025.

 

According to the red herring prospectus (RHP), the company proposes to utilise ₹30.8 crore from the net issue proceeds for setting up 11 new COCO- regular stores, ₹161.46 crore for lease, sub-lease rent and license fee payments for its existing COCO - regular stores, and ₹15.4 crore for purchasing new equipment and machinery. Additionally, the company plans to use ₹108.4 crore for marketing and advertising expenses. The remaining funds will be used for general corporate purposes. 

Here are the key risks associated with investing in Wakefit Innovations:

Brand dependency: According to the RHP, Wakefit’s performance is heavily dependent on its “Wakefit” brand, under which it sells mattresses, furniture and home furnishings. The brand plays a crucial role in influencing customer decisions, and any dilution or damage to its reputation could adversely impact the company’s business. 

 

High reliance on mattresses: The company earns a major share of its revenue from the mattress segment, contributing 60.65 per cent in the six months ended September 30, 2025, and 61.35 per cent, 57.54 per cent and 63.50 per cent in FY25, FY24 and FY23, respectively. Any shift in consumer preferences, supply chain disruptions, pricing pressures, or rising competition could materially impact its revenue and profitability.   ALSO READ | Meesho vs Aequs vs Vidya Wires IPO: Which one should you bet on? 

Dependence on own sales channels: As per the RHP, a major share of the company’s revenue comes from its own channels, including its website and company-owned stores. These accounted for 64.91 per cent of revenue in the six months ended September 30, 2025, and 56.97 per cent, 58.30 per cent and 57.50 per cent in FY25, FY24 and FY23, respectively. Any disruption to the website due to technical issues, cyber-attacks, or shifts in consumer behaviour, as well as operational challenges or expansion constraints at its stores, could adversely impact overall financial performance.

 

Raw material sourcing risks: Wakefit does not have long-term supply agreements for key raw materials such as chemicals, wood, fabrics, glue and metal components. As a result, its costs and production depend heavily on the ability to secure these inputs at stable prices and in sufficient quantities. Fluctuations in raw-material prices and availability due to factors like supply–demand imbalances, logistics issues, inflation, regulatory changes, competition, and broader economic conditions could negatively impact the company’s operations.

 

Legal proceedings: According to the RHP, the company, along with its directors, promoters and senior management, is involved in several legal and regulatory cases at various stages of adjudication. Some of these matters include claims that are quantifiable and may be joint or several. Any adverse ruling, individually or collectively, could affect the company’s reputation, management stability, and overall business.

Key competitive strengths of Wakefit Innovations:

Leading D2C home brand: Wakefit is among India’s largest direct-to-consumer (D2C) home and furnishing brands. It reported the highest revenue among D2C home and furnishing players in FY24 and, within nine years of operations, became the fastest homegrown brand among organised peers to cross ₹1,000 crore in total income. The company’s revenue from operations grew at a 24.87 per cent CAGR between FY22 and FY24, roughly 1.6 times the average growth rate of other organised players, according to the Redseer report.

 

Broad D2C portfolio: The company positions itself as a full-range home and furnishing solutions brand, spanning mattresses, furniture, and decor. It is the only D2C player to have crossed ₹1,000 million in revenue in all three categories in FY24, as per the Redseer Report. Additionally, the company ranks among the top three organised mattress players by revenue and leads peers in online mattress sales.  ALSO READ | Corona Remedies IPO price band at ₹1,008-1,062; check dates, GMP, objective 

Vertically integrated model: According to the RHP, Wakefit operates on a full-stack, vertically integrated model, handling everything from product design and engineering to manufacturing, distribution, and customer experience. This structure improves efficiency, strengthens brand loyalty, and provides a competitive advantage, the company said.

 

Omnichannel retail network: The company operates an omnichannel sales network combining its website, company-owned stores, marketplaces, and multi-brand outlets. Customers can discover and engage with the brand across digital platforms and physical stores, with a unified experience across touchpoints. The company stated this integrated approach strengthens reach and customer satisfaction, giving it an edge over traditional home and furnishing players.