Wakefit Innovations IPO Buzz: Rs 580 Cr Anchor Book Closed! Home Decor Giant Prepares for Dalal Street Debut

Home furnishings company Wakefit Innovations is set to launch its Initial Public Offering (IPO) with a significant Rs 580 crore raised from its anchor book on December 5, ahead of its public opening on December 8. The total IPO size is Rs 1,289 crore, marking a major step for the company's entry into the public market.

IPO Details and Anchor Book Success

• Wakefit Innovations announced its Rs 1,289-crore IPO, a crucial step for the Bengaluru-based company to list on Indian stock exchanges.
• The anchor book, which closed on December 5, saw robust demand, with Rs 580 crore raised from 33 institutional investors.
• Shares for the anchor investors were allocated at the upper end of the price band, Rs 195 per share, indicating strong investor confidence.

Offer Components

• The Rs 1,289-crore IPO comprises a fresh issuance of shares worth Rs 377.2 crore and an offer-for-sale (OFS) of approximately 4.67 crore shares valued at Rs 911.7 crore.
• The price band for the IPO is fixed between Rs 185 and Rs 195 per share.
• The public issue is scheduled to open for subscription on December 8 and will close on December 10.

Key Anchor Investors

• The anchor book saw participation from 9 domestic mutual funds, including HDFC Mutual Fund, Axis MF, Nippon Life India, Mirae Asset, Tata MF, HSBC MF, Edelweiss, and Mahindra Manulife.
• Global and other domestic investors like Prudential Hong Kong, Amundi Funds, Steadview Capital, Ashoka WhiteOak, HDFC Life Insurance, 360 ONE, and Bajaj Life Insurance also invested in the anchor book.
• These investors collectively acquired 2.97 crore equity shares.

Company Background and Major Shareholders

• Founded by Ankit Garg and Chaitanya Ramalingegowda, Wakefit Innovations is a prominent player in the home and furnishings sector, offering products like mattresses, furniture, and home décor.
• The company is backed by venture capital firms such as Peak XV Partners (formerly Sequoia Capital India), Elevation Capital, Verlinvest, and Investcorp.
• Among the selling shareholders in the OFS are promoters Ankit Garg and Chaitanya Ramalingegowda, along with investors like Peak XV Partners (holding 22.47%), Verlinvest (9.79%), and Investcorp (9.9%).

Utilization of Funds

• Wakefit plans to use Rs 30.8 crore from the fresh issue to establish 117 new COCO–Regular Stores.
• A substantial Rs 161.4 crore will be allocated for lease, sub-lease rent, and license fee payments for existing COCO–Regular Stores.
• The company aims to use Rs 15.4 crore for purchasing new equipment and machinery and Rs 108.4 crore for marketing and advertisement expenses.
• The remaining funds will be used for general corporate purposes.

Store Expansion Strategy

• Wakefit's COCO–Regular Stores have seen significant growth, from 23 in FY23 to a projected 125 by September 2025.
• The company has also expanded its Multi-Brand Outlet (MBO) count to 1,504 stores since April 2022.

Lead Managers

• Axis Capital, IIFL Capital Services, and Nomura Financial Advisory and Securities (India) are managing the IPO as book running lead managers.

Impact

• The successful IPO could boost investor confidence in the online home furnishings sector, potentially attracting more capital to similar companies.
• Wakefit's expansion plans funded by the IPO may lead to increased market share and profitability.
• The IPO's performance on listing day will be closely watched by retail and institutional investors.
• Impact Rating: 7

Difficult Terms Explained

• Initial Public Offering (IPO): The process where a private company first offers its shares to the public, allowing it to become a publicly traded company.
• Anchor Book: A portion of the IPO reserved for institutional investors who commit to buying shares before the IPO opens to the public. This helps build confidence and secure funding.
• Fresh Issuance: Shares sold by the company itself, raising capital directly for its operations and growth.
• Offer-for-Sale (OFS): Existing shareholders (promoters, investors) sell a portion of their shares to new investors. The company does not receive any funds from an OFS.
• Price Band: A range within which the IPO shares will be offered to the public.
• COCO Stores (Company-Owned, Company-Operated Stores): Retail outlets owned and managed directly by the company.
• MBO Stores (Multi-Brand Outlets): Retail stores that sell products from multiple brands.
• Book Running Lead Managers (BRLMs): Investment banks that manage the IPO process, including marketing, pricing, and allocation of shares.