Is Wakefit’s IPO a good long term bet for high-risk investors?

Synopsis Wakefit Innovations plans to raise over ₹1,288 crore via IPO for expansion and operational needs. The direct-to-consumer home furnishing company, profitable in the six months to September 2025 after prior losses, faces raw material price volatility. Investors with a high-risk appetite can consider the IPO for its long-term potential. ET Intelligence Group: Wakefit Innovations, a mattress and furniture maker, plans to raise ₹377.2 crore through a fresh issue to cover lease payment, marketing and advertising expenses and to fund capital expenditure. It will also raise ₹911.7 crore through an offer for sale. The promoter group's stake will fall to 36.8% after the IPO from 43%. It has aggressively opened stores in the past two years. However, it has turned profitable in the six-months to September 2025 after posting losses in the previous three years. Raw materials constitute around 45% of expenses. With no long-term contracts with suppliers, it is exposed to price volatility and supply chain disruption. Given these factors, investors with high-risk appetite can consider the IPO with a long-term view. Business Incorporated in 2016, Wakefit Innovations is a direct-to-consumer home and furnishing company. It has three segments-mattresses, furniture and furnishings. The company sells products across 700 districts across 28 states and six union territories. Its stores grew to 125 in September 2025 from 23 in FY23. According to Redseer, it was among the top three companies in the organised mattress market in terms of revenue in FY24. The mattresses segment contributes 61% to total revenue. About 2/3rd of its revenue comes from its own channels and rest comes from e-commerce or quick commerce platforms or multiple brands outlets. a hard bed: High raw material exposure and no long-term contracts mean investors must factor in price volatility, supply disruption Financials Revenue grew by 25.2% annually to ₹1,273.7 crore between FY23 and FY25. Its net loss narrowed to ₹35 crore in FY25 from ₹145.7 crore in FY23. Ebitda margin grew to 7.1% in FY25 from negative 10.6% in FY23. Net working capital days dropped to just four days in FY25 from 20 days in FY23, significantly lower than listed peer Sheela Foam, which averages around 39-41 days. For the six months ended September 2025, Wakefit's revenue and net profit were ₹724 crore and ₹35.6 crore, respectively. Valuation Live Events The company has just started reporting profit in the six-month period to September. Considering the post-IPO equity and annualised profit for FY26, the price-to-earnings (P/E) works at 90, compared with 200 for its listed peer, Sheela Foam. Its price-to-sales (P/S) multiple is four, compared with two, for Sheela Foam. (You can now subscribe to our ETMarkets WhatsApp channel) (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price ...moreless ONGC’s long-awaited recovery falters as performance slips back How UPI boom in rest of India hides a paradox in wealthy states Why Leyland and Iveco stand between Tata Motors' return to glory From near collapse to INR50k cr value: The journey of MCX AI is forcing a rethink. Can Indian IT finally build a serious corporate VC muscle? These large- and mid-cap stocks can give more than 25% return in 1 year, according to analysts 1 2 3