(L-R) Ankit Garg and Chaitanya Ramalingegowda, founders, WakefitMattress and furniture maker Wakefit will avoid managing the business around short-term share price movements and instead focus on long-term growth drivers such as omnichannel expansion, premiumisation, and repeat purchases, said cofounder Chaitanya Ramalingegowda as the company made its public market debut.
“We don’t want to take decisions based on share price, but we do want to ensure steady compounding of equity so that retail investors who think long-term and come on the journey, see value,” Ramalingegowda told ET in an interaction.
His comments come amid a muted stock market debut for the Bengaluru-based company on Monday, with Wakefit’s shares closing at ₹190.6 on the National Stock Exchange (NSE), 2.2 per cent below its issue price of ₹195. The company currently has a market capitalisation of ₹6,231 crore.
At the closing price on debut day, the company’s founders and early investors saw a reduction in their paper gains compared to earlier projections when the IPO price band of ₹185-195 was announced.
Cofounders Ankit Garg and Ramalingegowda hold 28.7 per cent and 8.06 per cent stake, respectively, in the company following the listing, valued at about ₹1,820 crore and ₹509 crore at the current market price. In comparison, at the IPO price, their holdings were valued at around ₹1,861 crore and ₹521 crore.
Garg and Ramalingegowda also made around ₹151 crore and ₹87 crore, respectively, from the offer-for-sale (OFS) portion of the IPO. Garg, who owns about 103 million shares, sold around eight million, while Ramalingegowda offloaded four million of his 31 million shares.
Peak XV Partners, Wakefit’s largest shareholder after Garg, holds 13.8 per cent stake and is sitting on approximately 9.3X paper gains on its investment, compared with about 11X at the time the IPO price band was announced. The venture capital firm trimmed its OFS to two crore shares from 2.5 crore, receiving around ₹400 crore, while its remaining stake is valued at about ₹873 crore.
“The time to take a company public is when you have more predictability over your next few quarters. You can see a clear operating leverage as your company continues to compound and scale. Over the last many quarters, Wakefit founders have seen a lot of those characteristics play out in their business,” said Sakshi Chopra, managing director at Peak XV Partners.
According to Chopra, Mamaearth was the first to list from the fund’s portfolio, followed by Wakefit. It is expecting a few more consumer-focussed companies to go public next year.
Among other selling shareholders, Verlinvest’s stake is valued at about ₹290 crore, representing a 2.3X paper gain, while SIG Asia VC and Korean investor Paramark hold stake worth about ₹307 crore and ₹49 crore, respectively.
Elevation Capital, which now owns 4.41 per cent of Wakefit, did not sell any shares through the OFS. Its holding is currently valued at about ₹279 crore.
Founded in 2016, the company initially focussed on sleep-related products such as mattresses, pillows, and bed frames, before expanding into a broader home portfolio including sofas, dining sets, wardrobes, study tables, and bookshelves. Currently, mattresses comprise about 60 per cent of its revenues.
As outlined in its IPO papers, Wakefit plans to open 117 company-owned, company-operated (COCO) stores over the next couple of years, expanding beyond the 40-50 cities it currently operates in. The company is also planning its first Ikea-sized `jumbo store’ in Bengaluru.
Wakefit will also deploy ₹15-20 crore on improving and expanding its manufacturing facilities.
On the stock’s performance, Ramalingegowda declined to comment, calling price movements “completely out of our control”. Instead, he said the listing brings added responsibility. “As a B2C company, being listed helps customers connect more with the brand, but it is also a responsibility because so many retail investors have put in their savings,” he said.
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